06-10-2018

Tankers: Northwest European clean MR freight rallies in as gasoline prices drop

Clean Medium Range tanker freight rates have rallied this week as gasoline traders scramble to ship gasoline out of Northwest Europe, where a significant build in stocks has pressured gasoline prices.

The UK Continent-US Atlantic coast route for 37,000 mt cargoes was assessed at Worldscale 150 Thursday, up 25 points from Wednesday, representing a 50% rise in less than two weeks.

The Stena Performance was heard on subjects to BP for a 37,000 mt gasoline cargo loading in Brofjorden on October 9 for a voyage across the Atlantic at w155, with a UKC option at w165.

One shipbroker said with gasoline in NWE cheaper than anywhere else this week, there is now “an arb working in pretty much any direction,” and that traders with relet vessels saw this and snapped up tonnage promptly, while holding back the relets for their own stems.

“The tonnage as a result tightened incredibly quickly, and those late to the game, and felt market may stutter as it had done previously, were forced to pay over the odds again from bullish owners that held back on offering while the market rose,” the shipbroker added.

The Eurobob gasoline crack spread — the value of FOB Northwest European gasoline barges relative to Dated Brent crude — has hit a three-and-a-half-year low due to slowing demand and buoyant crude prices.

After two slow weeks with the arbitrage route to the US Atlantic coast closed, gasoline stocks have built up. The number of available vessels, however, has thinned out rather quickly and there were 13 MRs in the 10-day window on Friday morning, according to another shipbroker.

Source: Platts

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