Home / Shipping News / Hellenic Shipping News / Product Tanker Market Could See a Boost This Summer

Product Tanker Market Could See a Boost This Summer

The product tanker market could see a boost over the coming months, as the US inventories need replenishing in a period when demand is expected to grow. In its latest weekly report, shipbroker Intermodal said that “the MR Atlantic time charter average experienced a significant increase of almost 150% last week, reaching $34,841 per day on Friday. This surge was primarily driven by the excess availability of shipping capacity in the Atlantic Market, particularly in the United States and Europe. One of the key factors contributing to this substantial leap is the start of the driving season in the US. During this time, it is a tradition for Americans to travel either by car or by plane, leading to a rise in demand for gasoline and jet fuel. As a result, stockpiling of these fuels has already begun. The peak of this surge is likely due to the substantial increase in TC2 rates just before summer and the driving season. Normally, this route experiences its highest demand in April when stockpiles are being filled. For reference, US gasoline demand typically rises by approximately 6% during the peak driving season, while jet fuel consumption sees an increase of nearly 8%”.

Source: Intermodal

According to Intermodal’s Research Analyst, Mr. Fotis Kanatas, “taking a closer look at the fundamental aspects of trade in the Atlantic, we observe a consistent decline in stockpiles in the United States, encompassing both crude oil and gasoline. This downward trend is fueled by a combination of factors, including the ongoing driving season and the escalating refining activities conducted by US refiners. In terms of crude oil, inventories have experienced a notable decrease of 12.5 million barrels (mb), reaching a total of 455.2 mb.

Source: Gibson Shipbrokers

While this figure remains below the 5-year average, it surpasses the corresponding value from the previous year, albeit exhibiting a declining trajectory. As for US gasoline stockpiles, they currently stand at 216.3 mb, a significant deviation from the 5-year average, falling outside the expected range, and remaining lower than the comparative figure from the previous year. Consequently, this situation may potentially prompt an increase in the importation of clean petroleum products into the US, originating from various origins, be it Europe or Asia. When considering jet fuel inventories, they are comparatively more robust than gasoline inventories. Currently, jet fuel stockpiles amount to 42.58 mb, indicating an 11.08% rise from the corresponding figure of 38.33 mb reported last year”.

Source: Intermodal

“With inventories of clean products dwindling on both sides of the Atlantic, and the driving season in the United States just around the corner, it remains to be seen whether we will see a move to other sizes that carry clean products such as LR2. One thing is for sure, the United States needs to replenish its inventories, so we should keep a close eye on the region for more trading activity ported last year”, Mr. Kanatas concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping