Closings of Sunoco Inc. and ConocoPhillips oil refineries on the U.S. East Coast would be “negative” for suezmax tankers that haul crude, said Arctic Securities ASA.
Sunoco said Sept. 6 it would sell or shut its last two refineries, located in Philadelphia and Marcus Hook, Pennsylvania. ConocoPhillips has idled its plant in Trainer, near Marcus Hook, as it seeks to sell the refinery. Refining capacity on the U.S. East Coast fell 16 percent over the past two years, Arctic said last month.
“We see this trend as structurally negative for the suezmax tanker market, due to the fact that East Coast refineries are primary consuming light, sweet crude from West Africa,” Erik Nikolai Stavseth, an Oslo-based analyst at Arctic, said in a report today. Sweet crude contains less sulfur than the sour variety.
Suezmaxes, each able to haul 1 million barrels of oil, are earning $11,407 a day on the voyage to the U.S. from West Africa, according to the London-based Baltic Exchange. Returns have dropped 65 percent this year.