Reality check du jour:
Shipping constraints limit flow of European gasoline to the US
London (Platts)--6Sep2005
Despite a significant draw of barrels to the US in the aftermath of Hurricane Katrina, a lack of available and appropriate shipping is limiting the potential for refined gasoline to reach the US from Europe, traders said.
Following the destruction of US production and refining assets in the southern US Gulf of Mexico states, the Paris-based International Energy Agency has called on member states to release refined products to the US to ease supply concerns.
But traders have said the limited number of vessels in Europe would severely restrict supply. "The IEA news took the sting out of the prices but in reality there is no way for any gasoline from Europe to get to the US.
There are no ships out there on prompt dates in the Med or in NW Europe," one trader said.
Since the IEA's call for 2-mil b/d stock release from member countries Friday, European 10ppm, sulfur-free, gasoline barges in the trading hub of Amsterdam-Rotterdam have retreated nearly $100/mt to be assessed by Platts at
$771.50/mt Monday.
Traders said the temporary waiving of the Jones Act, which allows for non-US flagged vessels to move between US ports, could exacerbate the limited number of ships in Europe.
"With all the action being the US, owners are unlikely to do the backhaul trip to Europe. We will see vessels staying in the US and Europe will only get tighter," one trader said.
Gasoline values in Europe were easing with the expected stock release set to improve availability, which had been severely depleted last week as the market shipped every available barrel of gasoline to the US, traders said.
"It's all about the number of molecules in the market as a whole," one trader said. "European prices will fall even if no fuel moves to the US as depleted volumes are replaced in Europe," the trader said. |
