Gasoline to U.S. Seen Slumping Amid Biggest Stocks in Years

The flow of European gasoline to the U.S. is poised to decline in the next two weeks as record fuel stocks for the time of year deter imports and cause shipping rates to slump, a Bloomberg survey showed.

Traders and oil companies will book 24 tankers to load the fuel during the two weeks to Feb. 6, according to the median estimate in a survey yesterday of seven shipbrokers and traders specializing in the trade. A week ago they expected 27 ships to be chartered in the corresponding period.

Supplies of the motor fuel increased 1.91 million barrels to 235 million in the week ended Jan. 11, the highest level since Feb. 18, 2011, according to the U.S. Department of Energy. Inventories have jumped 17 percent in eight weeks and are at the highest seasonal point since the department began reporting weekly data in 1990.

“Gasoline stocks are ample,” Gareth Lewis-Davis, a London-based energy strategist at BNP Paribas SA (BNP), said by phone today. “The high inventories will deter imports into the U.S. Seasonally, the U.S. is in a period of weaker demand.”

New York Harbor gasoline fell to $2.7274 a gallon on Jan. 15, the lowest this year, figures compiled by Bloomberg show. The price has since gained 5 percent. Lower imports of gasoline won’t affect pump prices, according to Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a consulting company in London.

“It’s not that imports are falling at a time of shortage,” Sen said. “There are plenty of gasoline supplies everywhere. The falling imports are a reaction to high supplies, which have lowered prices.”

Gasoline Consumption Slumps

U.S. gasoline consumption in the week ended Jan. 18 fell 1.3 percent compared with the same period a year earlier, according to the SpendingPulse report from MasterCard Inc. (MA) The average pump price declined, down 1 cent compared to a week ago to $3.31 a gallon, which is 2.4 percent lower than a year earlier, the report showed.

Earnings from tankers on the route plunged 30 percent to $15,620 day in the past two weeks, according to the London-based Baltic Exchange, a publisher of freight rates on more than 50 maritime routes.

The so-called Medium-Range tankers would be able to carry 888,000 metric tons of gasoline, or about 539,000 barrels a day. Of the 24 charters, 13 have been arranged and 11 are anticipated cargoes. About 45 ships probably will be available for the voyage, three more than last week, according to the survey.

Spot Charters

The survey is based on so-called single-voyage, or spot, charters and excludes loadings under longer-term contracts. It assumes shipments to the U.S. East Coast from northwestern Europe. Each vessel would normally haul about 37,000 tons of gasoline, or 315,000 barrels.

Following is a table of ships chartered and those probably hired for the trans-Atlantic voyage loading over the two-week periods from the dates shown. The table also displays the number of ships available to be booked.

*T Jan. 23 Jan. 16 Change Ships Hired 13 15 -13 Ships Probably Hired 11 12 -8% Total Hired 24 27 -11% Available Ships, Europe-U.S. 45 42 +7%

To contact the reporters on this story:
Rob Sheridan in London at 
rsheridan6@bloomberg.net;
Barbara Powell in Dallas at 
bpowell4@bloomberg.net

To contact the editors responsible for this story:
Alaric Nightingale at 
anightingal1@bloomberg.net;
Dan Stets at 
dstets@bloomberg.net