USGC Clean Freight To Caribbean Hits 2022 High Amid Strong Oil Demand

The clean freight rate loading on the U.S. Gulf Coast to the Caribbean hit an all-time high on Feb. 25, 2022, as traders rushed to fill a high-demand spot market after waiting for a tricky month that favored short-haul voyages to ballast ships. quickly to the gulf coast for fresh cargo.

Freight rates charged on the USGC en route to the Caribbean for medium-range tankers increased by $75,000 on Feb. 25 to a flat rate of $800,000, up about 22% from the start. of 2022.

At least 10 product shipments were repaired throughout the week from the Gulf Coast to the Caribbean: Aquasmeralda for Trafigura, Velebit and Eurosailor for Marathon, Essie C for Valero, Agioi Fanendes for Chevron, Stena Impulse for ST, and Alpine Link and another vessel to be nominated for Exxon, sources told S&P Global Platts. Rue Bastille and UACC Ras Laffan were also repaired, the charter having not been reported.

Twelve more devices were heard during the week in other parts of Latin America, from Chile to Brazil and eastern Mexico. Sources said the volume of cargo to the Caribbean was higher than normal as shipowners wanted to keep ships close to the USGC to account for rising bunker rates.

“Bunkers are moving higher, people are looking for longer journeys at the moment so they are going to have to price in an incentive,” said one shipowner, stressing the need for fast trips to ballast tankers to the east. USGC.

A Latin American commodity trader said vessel availability coincided with a changing market structure and strong demand from countries like Jamaica and Colombia, which typically export diesel but have had to import due to refining issues. .

“The problem here was the massive market shift. We all waited until late February… to load cargo,” he said. “The whole Caribbean is dry. ‘avoiding the roll, so everyone and their aunt were loading cargo. Also, Colombia brought in more for March due to refinery issues.

He said market demand could drop significantly by mid-March.

Tonnage was noticeably tight for mid-February dates for medium-range fast tankers, with around three to five vessels available on February 17 for immediate loading from the US Gulf Coast. More availability picked up later, with nine to 11 ships available to load in the invite window for February 22.

The market for Latin American products was moving from the bidding process to the fixing process. Traders said during the week that bidding markets had finally calmed down, with global tensions adding to reduced seasonal demand, the passage of a major wave of bidding and the higher prices for cost-conscious consumers in the region.

“Gasoline and LPG prices will certainly increase in all countries that need to import crude oil and/or products,” a market source said.
Source: Platts

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Felix J. Dixon