Hurricane Matthew kept some tankers lingering in the US Gulf Coast, forcing down rates. But potential tight gasoline supply in the area may draw in more cargoes.
The category-four storm is set to hit mainland North America by tonight and early Friday morning. Much of the Atlantic coast of Florida and South Carolina remain under hurricane watch as Matthew, which is bringing winds up to 140 miles per hour (225 kilometres per hour) and storm surges up to eight feet, approaches the US. Florida is asking 1.5 million people who live in Matthew’s path to evacuate.
The storm has already passed the main navigation route through the Caribbean Sea, freeing up ship transits. But four or five ships are lingering in the US Gulf Coast, according to tanker brokerage MJLF, looking for cargoes.
“There is some prompt tonnage in the Gulf currently,” said MJLF researcher Court Smith. “After the weather delays, we could see the tonnage clear out.”
The extra supply has pushed down the Baltic Exchange’s assessment for medium-range (MR) tanker earnings on backhaul cargoes from the US Gulf Coast to Europe back down to a negative level.
But previous hurricanes hitting the Caribbean have provided a boost to rates, Smith says. Rates out of the US Gulf Coast rose following three out of four of the major tropical storms that hit the western portion of the Atlantic Basin last year.
With the region’s evacuations causing a spike in gasoline demand, Smith says charterers may have to book more ships to bring gasoline to areas affected by Matthew.
“The US southeast in still a little short of gasoline,” Smith said. “You could see an uptick in activity following the storm.”
Separately, cruise lines continue to divert ahead of Matthew’s approach. The 2,052 Carnival Ecstasy (built 1991) remains at sea to avoid the storm, but will return to its home port of Charleston on Sunday. The 2,758-berth Carnival Victory (built 2000) disembarked all passengers and will also remain at sea to ride out the storm. Ship traffic has also halted at the ports of Miami, Jacksonville, Fort Lauderdale and Charleston.
