Clean transatlantic tanker rates hit by ship glut

Transatlantic tanker rates for refined petroleum products on top export routes were mostly steady on Wednesday although a growing glut of vessels kept the transatlantic market under pressure. Rates for medium-range tankers for 37,000 tonne cargoes from Rotterdam to New York route moved to W90.00, or $816 a day when translated into average earnings on Wednesday, from W90.00 or $853 a day on Tuesday and W90.56 or $749 a day last Wednesday. On Monday average earnings hit a record low. "The recent lack of activity in the transatlantic MR market has seen tonnage on the Continent swell, increasing the pressure on rates," broker SSY said. In April last year, rates reached their highest since 2008 on a jump in U.S. gasoline demand, helping reduce the number of tankers available for hire. Since then, average earnings have remained volatile. "Earnings conditions for MRs have deteriorated markedly in the last few months," consultants MSI said.

"Any summer gasoline import spike from the U.S. has yet to materialise with overall U.S. gasoline imports remaining low." Analysts said reduced refinery capacity in the Atlantic Basin could boost long-haul demand for the wider products tanker sector in coming years, helped by the delivery of fewer tankers. Typical Long Range 2 or LR2, 75,000 tonne shipments on the Middle East Gulf to Japan route were steady on at 98.95 in the worldscale measure of freight rates, from W98.27 on Tuesday and W96.85 last Wednesday. Long Range 1 tankers, carrying 55,000 tonne loads from the Middle East Gulf to Japan, were at W120.38 on Wednesday, from W120.58 on Tuesday and W121.91 last Wednesday. "We have an active week behind us, with charterers involved in both LR1 and LR2 segments interested in east and west destinations," broker Fearnleys said on Wednesday. In the Mediterranean, 30,000 tonne shipments ex-Algeria to southern Europe were at W128.78 on Wednesday, versus W128.78 on Tuesday and W131.11 last Wednesday.