Clean freight market report: More USGC MR weakness to come

Commentary summary:

The Sparta RBI (relative basket index) compares the route in question against all material relevant global competing routes delivering crude grades into the same destination.

It provides an under/overvalued signal and is an inverse leading indicator for freight demand and FFA price action.

· TD25 RBI is $5.59/mt undervalued. Afra tonnage supply in the 14-day ahead window is in line with the trailing 90-day average of 16 vessels. This count is down from 21 open Afras last week. Spot TD25 rates at 120 WS look too cheap in comparison to August at 135 WS and we’re already in the 3rd decade of July. Expect the spot / Aug spread to narrow with spot closing the gap higher towards August. The recent weakness in spot rates has made USGC Afras land very competitively into NWE.

Philip Jones-Lux is Senior Analyst for Sparta. Having worked with organisations such as JBC Energy and RP Global, Philip is a seasoned energy market analyst with expertise across the oil barrel and power markets

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