Gasoline Cargoes to U.S. Poised to Advance by 45% on Refinery Maintenance
Gasoline shipments from Europe across the Atlantic Ocean will increase over the next two weeks as U.S. refineries remain in a maintenance period, curbing gasoline production.
Twenty-nine tankers were booked or are due to be chartered for loading in the period, according to the median estimate in a Bloomberg News survey of five shipbrokers, one owner and two traders yesterday. That’s nine more cargoes than last week, previous survey data show.
“In the U.S., the fluid catalytic cracking units at several refineries are out of commission” while continued gasoline exports from the U.S. Gulf to Latin America are also diverting supplies from the East Coast, Roy Jordan, a London- based research associate for FACTS Global Energy, said today by phone.
U.S. refineries step up maintenance during the first weeks of October to get ready for more production of winter fuel. Refinery utilization rates decreased to 87.7 percent by the end of September, after jumping to a year-high in the third week of August, according to data from the U.S. Department of Energy.
Of the 29 vessels, known in the industry as medium-range tankers, 14 have already been booked and 15 will probably be hired, according to the survey. They will be able to carry about 9.1 million barrels of gasoline, or 651,000 barrels a day over the next two weeks. The rate is about 78 percent of the daily 838,000 barrels the Department of Energy said the U.S. imported over the past 12 months.
Ample Available Ships
The auto fuel for November delivery decreased 1.1 percent to $2.7173 a gallon by 3:13 p.m. London time on the New York Mercantile Exchange. The October forward contract for the Northwest Europe to U.S. East Coast freight route declined 7 percent yesterday to $6,745.54, according to data from Marex Spectron.
“We heard there were about 13-14 ships that might be booked but there were ample available ships to absorb the increased activity,” Ben Goggin, a freight-derivatives broker at SSY Futures Ltd. in London, said by e-mail.
There are 28 vessels likely to be available to carry trans- Atlantic gasoline cargoes, four less than last week, the survey showed. Daily rental income for tankers carrying gasoline across the Atlantic decreased 2.8 percent yesterday to $7,021, according to the Baltic Exchange in London. That’s more than double earnings of $2,493 owners were making a month earlier, according to the exchange.
U.S. East Coast
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 increased 0.1 percent to 151.04 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.
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