CPP Market Report: Arbs shut & lists lengthen

TC14 spot Freight Supply & Demand (FSD) has flipped bearish after previously being supportive. The model now points to a move lower toward 283 WS, with the change in outlook driven primarily by demand fading rather than a sudden surge in vessel supply. The final leg higher in TC14 mid–last week has pushed February USGC MR arb margins negative; at around 300 WS, essentially all USGC February-loading MR outlets are shut except diesel into Brazil. That shift matters because it removes incremental flow support and reduces implied vessel demand into the back half of February.

On the supply side, MR tonnage is beginning to lengthen back toward average. The headline count is not extreme, 11 open MRs in the 7-day window versus a 13-vessel average, but the direction of counts is less supportive. A key directional confirmation signal is USGC diesel into Rotterdam now shut by roughly -$11/mt, which is classically bearish for USGC MR demand. From an execution standpoint, charterers should press for below last done, while owners should look to fix sooner rather than later given the skew toward softer levels.

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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