Transatlantic Clean Tanker Rates Rally to 2-Month High

four wind lr2 tanker taurus
Four Wind, an LR2 Tanker image courtesy Taurus Tankers

reuters logoLONDON, April 22 (Reuters) – Clean tanker rates for refined petroleum products on top export routes were mostly lower on Monday while active bookings pushed the transatlantic market to its highest level in over two months.

Rates for medium-range (MR) tankers for 37,000 tonne cargoes from Rotterdam to New York were at W163.96, or $19,145 a day when translated into average earnings, their highest since Feb 13.

That compared with W159.58 or $18,220 a day on Friday and W143.64 or $14,041 a day last Monday.

“After several weeks of gradual declines across the product tanker segment, increased activity over the past 1 to 2 trading days is propelling MR rates in the Atlantic Basin higher,” said Omar Nokta, senior analyst Global Hunter Securities on Monday.

“With the North American summer driving season ahead, MRs in the Atlantic Basin should continue to see support.”

Earlier this year transatlantic earnings jumped to their highest in a year helped by gasoline arbitrage trading and firmer booking activity.

“In the European MR market, sustained activity placed further constraint on tonnage availability,” broker CR Weber said.

In April last year, rates reached their highest since 2008 on a jump in U.S. gasoline demand, helping to reduce the number of tankers available for hire. Since then, average earnings have remained volatile.

Long Range 1 tankers, carrying 55,000 tonne loads from the Middle East Gulf (MEG) to Japan, were at W113.88 or $12,270 a day on Monday.

That compared with W114.38 or $12,715 a day on Friday and W118.45 or $13,059 a day last Monday.

“LR1 rates … continue to soften with scarce fresh long-haul enquiry reported off a well-stocked position list,” broker SSY said.

Late last year the volume of LR1 fixtures jumped to their highest in years, helped by healthy naphtha and jet fuel bookings to Asia, sending earnings to their highest since early October 2009.

Larger Long Range 2 or LR2, 75,000 tonne shipments on the Middle East Gulf to Japan route were at W94.77 or $14,038 a day. That compared with W94.95 or $14,398 a day on Friday and W96.00 or $13,704 a day last Monday.

Analysts said reduced refinery capacity in the Atlantic Basin could boost long-haul demand for the wider products tanker sector in coming years. (Reporting by Jonathan Saul, editing by William Hardy)

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