Let it Snow

While the weather in New York is not yet frightful, rates this week have been quite delightful for product tanker owners trading tonnage in the Atlantic Basin! Time charter equivalent earnings on the Transatlantic trade from UK Continent to the US Atlantic coast rose to almost $22,000 per day this week, or over twice as high than the year to date average and about $2,000 more per day than VLCCs trading from the Arabian Gulf to the Far East. As we discussed a few weeks back, increased activity out of the US Gulf has been an important source of support for MR rates as PADD III refiners ship surplus distillate to markets abroad. This week thin availability of prompt tonnage emboldened product tanker owners to leverage higher rates as charterers sought to turn over inventories before the year end. Although the market appears to be cooling coming into the Christmas holiday, temperatures in the United State’s largest heating oil markets are still unseasonably warm. If the weather turns bitter, it could very well keep the pre-holiday rally in product tanker rates going into the New Year. Download here