Freight rates for medium-range tankers (MR) outbound from the US Gulf Coast legged up again on Friday, reaching the highest levels since June, thanks to onshore logistical problems creating spot charter opportunities.
The Baltic Exchange’s assessment on TCE rates for the US Gulf-to-Europe voyage moved up to $3,600 per day, a $1,000 jump from yesterday and the highest since 21 June.
Panellists had been assessing rates on the route at below operating costs for shipowners over much of August as the arbitrage on refined products movements remained closed and US Gulf refineries slowed production.
But the ongoing shutdown of a portion of a major onshore refined products pipeline has created some short-term trading opportunities. With gasoline and diesel backing up at US Gulf Coast refineries, prices have fallen creating more arbitrage opportunities, says tanker broker MJLF.
“The number of clean tankers available in the US Gulf fell as gasoline and distillate cargoes were booked for export,” MJLF analyst Court Smith says in a weekly report.
But most of those cargoes may head just be on the short-haul voyage to Latin America, which is the main destination for much of the US refined products exports. The quick turnaround of supply may mean more ships head back to the US Gulf and “may limit the upside owners see down the line,” MJLF says.
The move up makes the back-haul voyage more profitable than the front-haul voyage from Europe to the US, which remains stuck near a two-year low of $2,300 per day on the lack of gasoline arbitrage to the US East coast due to high inventories.
