Gasoline moves push up clean tanker rates

Mild weather in US East Coast keeps drivers on the road, fuelling tanker trade from NWE

Clean tanker rates are seeing mixed fortunes in the New Year as strengthening US gasoline demand offsets still weak distillate demand.

The Baltic Exchange’s TC2 route saw its average time charter equivalent (TCE) rate jump 22% from Monday to reach $20,060 per day. That route tracks rates for medium-range (MR) tankers shuttling clean petroleum products between the US Atlantic Coast and Europe.

MJLF analyst Court Smith says the move in freight rates reflects stronger gasoline demand along the US East Coast thanks to mild winter weather. Moreover, recent data indicating strong new car sales suggests an additional spur to demand.

“People do travel more by car when it’s warm,” Smith said. “And if you’ve seen the recent car sales data, you’ll know people are buying bigger cars and SUVs.”

In addition, some refineries are planning turnarounds for mid-January, prompting some stockpiling ahead of tighter supply.

However, the TC14 route has moved in the opposite direction, going from $14,740 to $12,684 per day, the Baltic said.

The route, which tracks movements of clean products aboard MR tankers between the US Gulf Coast and Europe, likely reflects still weak demand for heating oil on the continent, Smith says. But high inventories of distillate may get worked down, he added, as water levels on the Rhine subside, allowing increased barge movement from the ARA (Amsterdam-Rotterdam-Antwerp) tank farms to inland storage.