Clean freight WoS market report: USGC rally overdone, NWE stuck in a tight band

USGC MR spot at 190 WS looks stretched as arb margins shut and tonnage holds steady; meanwhile, NWE faces limited pricing power with a narrow workable 90–125 WS window and mixed arb signals.

USGC MR: Spot at 190 WS is ~10 points overvalued and too high given current supply-demand. LATAM arbs (diesel/gasoline) are closing, and TA diesel is shut by $10.50/mt — TC14 must fall below 145 WS to reopen. Tonnage sits at 9 (avg 14), but never dropped below 9 during the rally, suggesting the 80-point spike is overdone and somewhat unwarranted. Spot outlook is mixed: supply is tight, but arb margins are worsening. Forward TC14 (Sep–Dec) is 5–10 WS undervalued vs arb margins and could strengthen. Diesel TA margins improve materially from September onward. Spot is overvalued and the forward curve is undervalued.

NWE MR: TC2 bullishness faded as tonnage returned to average (17 vessels). Arbs were weak even at 90 WS in July and fully shut at 145 WS. At 109 WS, margins are mixed — TA gasoline remains marginally shut, but refiner margins are open. ARA is gaining appeal for LATAM as TC14 spikes. NWE rates lack pricing power: arb margins aren’t lifting with freight. PADD 1 draws and softer TC2 are nudging arbs toward neutral. Gasoline margins into Montreal and WAF are wide open for August. The market has a narrow pricing window: 90 WS is too low, 125 WS already too high.

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.

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