NWE MR Market Update
‘- NWE MR vessel supply in the 7-day ahead window stands at 19 ships against a 90-day moving average of 17, placing prompt availability 2 vessels above average. This is a meaningful shift from the previous Friday count where supply was below average. The supply signal has flipped from bullish to bearish, though with a large amount of cargoes still outstanding.
– Spot TC2 sits at WS 218 with the 7-day ahead model forecasting WS 196, a projected decline of 22 WS points through the 21-30 March load window. That said, rates appear to have found a floor at around 37 x WS 220 TA basis, with owners back in a bullish mood given the volume of unfixed cargo still in play. NWE has become the next best export hub to the USGC, and with strong global CPP demand, the drawn-out crisis is sustaining oil demand and supporting enquiry levels.
– Fixture activity continues to support the South and East Africa pull underpinning NWE MR demand. Torm Louise was placed on subs loading Continent for South Africa at $3.5m lumpsum with a 37kt gasoline cargo, and Navig8 Gladiator followed on similar terms at $3.55m lumpsum on the same routing. Lady Amanda was also placed on subs loading Dunkirk for West Africa at WS 320 with a 37kt gasoil cargo, reflecting the premium over TC2 available into WAF.
– The Amsterdam to Offshore Lome gasoline arb remains firmly open in April and holds strongly through June. This continues to point to sustained West Africa and South and East Africa cargo enquiry in the coming months across CPP. The Amsterdam to Alpha Zone arb is also modestly open across the forward curve, providing support for Latin American gasoline flows.
– The Rotterdam to New York arbs are shut and the Cartagena gasoline arb offers muted near-term support. The USGC remains the most attractive CPP market globally, drawing owner attention and absorbing eastbound tonnage. The NWE MR market continues to operate on a case-by-case basis as earnings are wide and very destination specific, but the near-term bottom in rates should be in.
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