Gasoline shipments to the U.S. from Europe will decline over the next two weeks as refineries on both sides of the Atlantic Ocean enter a maintenance period to prepare for accelerated winter fuel production.
Twenty tankers were booked or due to be chartered for loading in the two-week period, according to the median estimate in a Bloomberg News survey of three shipbrokers, one owner and one trader yesterday. That’s the lowest since the end of August and down 35 percent from 31 tankers last week.
Refiners in Europe have cut production to conduct plant maintenance and in response to declining processing profits. Eni SpA, Hellenic Petroleum SA and Ineos Group AG are among companies to have halted or slowed output.
“We have seen many refiners cutting runs because crude-oil prices are too high compared to product prices,” Ehsan Ul-Haq, senior market consultant at KBC Energy Economics, said yesterday by phone from Walton-on-Thames, England. “As long as they don’t make a profit, it doesn’t make sense to carry on refinery operations.”
Gasoline stockpiles in independent storage in Amsterdam-Rotterdam-Antwerp, Europe’s oil-trading hub, plummeted to the lowest level in almost eight years in the week to Sept. 29, according to PJK International BV. The auto fuel for November delivery rose 0.5 percent to $2.5828 a gallon by 1 p.m. London time on the New York Mercantile Exchange.
Shipments to Asia
The closing of Royal Dutch Shell Plc’s largest refinery, in Singapore, may also draw more refined oil products from Europe, according to James Zhang, an energy strategist at Standard Bank Plc. Shell said today the offshore plant would stay shut until investigations into last week’s fire conclude.
Of the 20 vessels in the survey, known in the industry as medium-range tankers, 11 have been booked and nine will probably be hired, according to the responses. They will be able to carry about 6.3 million barrels of gasoline, or 450,000 barrels a day over the next two weeks. The daily rate is 54 percent of the 835,000 barrels the U.S. imported over the past year, according to the U.S. Department of Energy.
There are 32 vessels likely to be available to carry trans-Atlantic gasoline cargoes, nine more than in last week’s survey.
Daily rental income for tankers carrying the fuel across the Atlantic yesterday fell 14 percent, the most in almost a month, to $9,314, according to the Baltic Exchange in London.
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 tanker would normally haul about 37,000 tons of cargo, or 315,000 barrels.
Charter rates on the route fell 5.1 percent to 159.17 industry-standard Worldscale points yesterday, according to the exchange.
The points are a percentage of a nominal rate, or flat rate, for more than 320,000 specific routes. Flat rates for every voyage, quoted in U.S. dollars a ton, are revised annually by the Worldscale Association in London to reflect changing fuel costs, port tariffs and exchange rates.