Traders Boost U.S. Gulf Heating Oil to Europe on Winter Demand

Traders booked the most cargoes of heating oil and diesel to Europe from the U.S. Gulf since June to meet accelerating demand for the winter fuel.

Spot-tanker charters in the four weeks ended Oct. 20 rose to 1.2 million metric tons of cargo, according to data compiled by Bloomberg today from Simpson, Spence & Young Ltd., the world’s second-largest shipbroker. The figure is 45 percent more than the corresponding period to Oct. 13 and the most since June 9. Gulf Coast refineries typically export gasoil to Europe for heating offices and homes, as well as diesel.

Refinery maintenance across Europe has curbed the region’s inventories of gasoil, increasing the need to import, according to KBC Energy Economics, a Walton-on-Thames, England-based research company. Stockpiles in independent storage in Europe’s Amsterdam-Rotterdam-Antwerp oil-trading hub dropped to 2.01 million tons at the start of the month, the lowest for the time of year since at least 2007, according to PJK International BV, a Netherlands-based company that tracks supplies.

“U.S. refineries have seized an opportunity to send gasoil,” KBC analyst Ehsan Ul-Haq said by phone today. “Germany is Europe’s largest consumer of gasoil, and will be stockpiling before winter so demand has been healthy in recent weeks.”

Thirteen ships were booked or anticipated to haul cargoes to Europe from the U.S. Gulf in the two weeks to Oct. 31, compared with seven in the year earlier period, a Bloomberg News survey of shipbrokers on Oct. 16 showed.

Charter costs to haul 38,000 tons of cargo from the U.S. Gulf to Europe gained 2.1 percent to 87.86 Worldscale points yesterday, after falling in 12 of 13 sessions to Oct. 18, according to data from the London-based Baltic Exchange, a publisher of prices on more than 50 maritime routes.

The data on charters don’t include cargoes transported under longer-term freight contracts and depend on the information that’s reported to the market.

To contact the reporter on this story: Rob Sheridan in London at rsheridan6@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net

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