Eyes from both the maritime and petroleum industries turned toward the Atlantic Ocean late last week when it was reported a ship loaded with unleaded gasoline en route to New York had been diverted to a Caribbean storage hub.
It was not the first time on its voyage that the Amorea, a Long Range 2 tanker, had caught attention.
The first was that an LR2 rarely heads into New York.
“She’s a big girl,” a shipbroker said of the 115,760 dwt ship.
A tanker that size cannot pull directly up to the docks in New York, a broker said.
“She would have to be lightered,” he said.
The second time the ship showed up on people’s radar was when it changed course.
“It happens all the time that the Long Range 2 tankers get diverted to Caribbean storage facilities,” a Europe-based shipbroker said. “I don’t think this is any peculiar case. There is also a possibility that Amorea, which seems to be on a time charter to Shell, may have moved to Caribbean in order to sell it to the third party.”
Though not common, seeing a ship diverted is not unheard of due to changing market conditions, sources said.
“It really is a function of the market,” a broker said. “It all depends on if the arb is open from the Continent to the US.”
To be sure, US gasoline prices have come under pressure in recent trading sessions. After averaging 174.81 cents/gal during the week ended April 14, the NYMEX May RBOB contract finished the week ended April 21 at 164.46 cents/gal. Friday’s flat price was therefore the lowest front-month RBOB futures settle since March 28, when the contract finished at 163.64 cents/gal.
This may help explain why the shipbroker said some other cargoes had recently been diverted.
“We saw it a few weeks ago when jet from Asia, which usually goes to Los Angeles, got diverted through the Panama Canal and ended up in the Bahamas and Florida.”
A Handysize tanker was also redirected last week. The MS Simon was headed toward New York, but a few days out for the port, the ship began heading south and, according to cFlow, Platts’ trade-flow software, is located east of Cuba.
According to a source, Gunvor sold the cargo to Noble, and thus the discharge port changed.
Shipping market participants said the diversion of one ship due to a lost arbitrage is not a sign of things to come.
“It’s one ship,” a shipowner said. “It’s minor.”
The shipbroker said there is no apparent drop-off in interest for moving cargoes from Europe to the US Atlantic Coast.
“There are 10 Medium Range tankers coming into New York over the next 10 days,” he said. “They’re not slowing down.”
US Energy Information Administration data released Wednesday seems to corroborate this notion. Despite stronger regional refinery runs, USAC gasoline imports saw a healthy gain, climbing 214,000 barrels week on week, or about 44%, in the week ended April 14. These barrels accounted for the majority of total US gasoline import growth, which was up 355,000 barrels week on week.
Although this data does not identify the origin of these imports, US Customs data showed that cargoes of various gasoline grades from the Netherlands, Spain, Norway, Sweden and the UK all found their way to the USAC during the week in question.
In early Monday trade, New York Harbor barge-delivered F2 RBOB was trending slightly above Friday’s close of NYMEX May RBOB futures minus 0.95 cent/gal. A trade source said that a barge of the product for prompt delivery was traded at May futures minus 0.75 cent/gal, and another barge for delivery on any day of April was bid at futures minus 1.0 cent/gal. New York Harbor premium H2 RBOB was also talked above Friday’s settlement price.
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