AG CPP Report: Freight remains under pressure

AG LR1: Spot TC5 rates have fallen below six-month lows, sliding roughly 50 WS points since 8 September. As freight weakened, arb margins deteriorated — a strong bearish signal suggesting freight currently has no pricing power. LR1 AG-loading arb margins remain negative, with only the perennial gasoline arb into Indonesia and naphtha into Singapore still barely positive. Distillate arbs into Europe are firmly shut, with the diesel arb into Barcelona closed by over $30/mt for October loadings and jet arbs shut by more than $12/mt. Naphtha arbs into the Far East are also closed, with Med barrels landing materially better than those from the AG. The market is suffering from a painful lack of incremental demand, likely exacerbated by regional refinery maintenance.

Michael Ryan, our Freight Commodity Owner at Sparta, brings over a decade of experience with Trafigura in the energy sector managing risk across products and regions before becoming Head of Risk for subsidiary Puma Energy. Michael then joined the Trafigura commercial team trading freight while successfully growing the physical fleet through strategic dealmaking.

Sparta is a live, market intelligence and forecasting platform that enables oil traders, refiners, banks, hedge funds and wholesalers to have access to real-time and global actionable insights to capture market opportunities before others.

To find out how Sparta can allow you to make smarter trading decisions, faster, contact us for a demonstration at sales@spartacommodites.com