Bloomberg News

Europe-U.S. Gasoline Cargo Falling, Ship Supply to Double

January 08, 2012

(Updates with analyst comment from third paragraph.)

Jan. 5 (Bloomberg) -- European gasoline shipments to the U.S. are set to plunge 21 percent in the next two weeks, and the number of available ships for the route may almost double, a Bloomberg News survey showed.

Traders and oil companies booked or intend to book 19 vessels for loading to Jan. 19, according to the median estimate in a survey yesterday of six shipbrokers, one trader and one owner, who all specialize in shipping the auto fuel. Two weeks earlier, a total of 24 ships were hired to haul gasoline to the U.S. from Europe.

U.S. gasoline imports have fallen since the start of December, declining 11 percent to 734,000 barrels a day for the week ended Dec. 30, according to U.S. Department of Energy data. Unemployment in the U.S. and less gasoline buying during the winter months contributed to reduced demand for auto fuel shipments from Europe, according to Ehsan Ul-Haq, senior consultant at KBC Energy Economics in Walton-on-Thames, England.

“Demand for gasoline is related to the state of the economy, and unemployment is still high, so people are spending money on other things rather than travel,” Ul-Haq said by phone today. “Seasonally, this is one of the weakest times for gasoline demand in the U.S.”

U.S. gasoline demand tends to peak during the so-called driving season from the end of May to the first week of September. The number of people continuing to collect jobless benefits fell by 22,000 in the week ended Dec. 24 to 3.6 million, according to the U.S. Labor Department.

Atlantic Ocean Cargoes

There are 31 vessels likely to be available for shipping cargoes across the Atlantic Ocean, according to the survey. That’s 94 percent more than the previous survey showed on Dec. 22. Daily returns on the Rotterdam-to-New York trade route retreated 23 percent since Dec. 23, sliding to $16,990 today, according to the London-based Baltic Exchange.

The ships, known in the industry as medium-range tankers, would be able to carry about 5.98 million barrels of gasoline, or 427,000 barrels a day, over the next two weeks. Of the vessels chartered or due to be hired, 11 have been booked and 8 more are likely to be arranged, the survey showed. That’s 53 percent of the 809,000 barrels the U.S. imported daily over the past year, according to the Department of Energy.

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 gasoline, or 315,000 barrels.

The suspension of three Petroplus Holdings AG refineries may curb gasoline supplies in Europe, and reduce the number of shipments to the U.S., said Ul-Haq.

“Europe will need to keep some gasoline as Petroplus’s refining capacity is reduced,” said Ul-Haq.

--Editors: Sharon Lindores, Dan Weeks

To contact the reporter on this story: Rob Sheridan in London at rsheridan6@bloomberg.net

To contact the editor responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net


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