At least 15 tankers were scheduled to ship 570,000 metric tons of the fuel to the U.S. Atlantic Coast from Europe as of April 20, the least for a comparable period since December, according to Clarkson Research Services Ltd., a unit of the world’s biggest shipbroker. A total of 1.14 million tons was booked to sail in March.
“The main downside risk on gasoline remains the demand erosion or destruction risk as gasoline prices at the pump are starting to average $4 a gallon before the start of the driving season,” Olivier Jakob, managing director of Switzerland-based consultant Petromatrix GmbH, said on April 25. “The U.S. driving budget is double what it was in the spring of 2009.”
A decline in imports at a time when motorists normally start taking to the roads for summer vacations underlines concern that demand is falling, limiting export opportunities for European refiners, including Total SA, the largest in the continent, and energy traders such as Morgan Stanley. The International Energy Agency on April 12 said that swelling fuel costs are eroding growth in the world’s largest economy.
Profit from buying gasoline in Europe and selling it in the U.S. shrank to a two-month low at 8.88 cents a gallon, data from London-based brokerage PVM Oil Associates Ltd showed. That’s down 41 percent from this year’s peak at 15 cents on Feb. 28.
‘Demand Destruction’
“With oil prices so high, people will certainly drive less,” James Williams, an economist at WTRG Economics, an energy-research firm in London, Arkansas, said April 19. “There will be demand destruction.”
U.S. consumption of the motor fuel is likely to average 9.3 million barrels a day this summer, rising 0.5 percent, or 45,000 barrels a day, compared with last summer, the U.S. Energy Department said in its summer fuels outlook report on April 13.
“Our forecast calls for modest growth in motor gasoline and distillate fuel consumption, reflecting both continued economic growth and the restraining effects of higher crude oil and product prices compared with last summer,” according to the Department.
Imports fell 224,000 barrels a day, or 21 percent, to 853,000 barrels a day in the two weeks to April 18, according to Energy Department data. The volumes are forecast to average 630,000 barrels a day through Sept. 30, a drop of 70,000 barrels a day from last summer, the department said.
Reduce Travel
“U.S. gasoline demand has so far shown the clearest indications of the impact of high prices on consumption,” David Wech, head of research at Vienna-based consultant JBC Energy GmbH, said in a note April 26. “Amid concerns about the health of U.S. finances and the path of the global economy, consumers might reduce non-essential travel.”
Returns from the transatlantic trade also eroded as supplies dwindled in Europe, pushing benchmark gasoline to a record high in the Amsterdam-Rotterdam-Antwerp, or ARA, oil hub. Eurobob grade traded as high as $1,130 a ton yesterday, the most since the contract was introduced in 2010.
Refinery shutdowns reduced stockpiles of gasoline held in independent storage in the ARA-region to 644,000 metric tons in the week to April 21, the lowest since Dec. 30, according to data from Netherlands-based researcher PJK International BV.
Gasoline’s crack, or premium to crude, will likely stay capped in Europe even as refiners undertake spring refinery maintenance, analysts including Peter Stewart at KBC Advanced Technologies Plc, a researcher based in Walton-on-Thames, England, said in an April 11 note.
Modest Gains
“Ample refining capacity means gasoline cracks should stay in single digits through the period of peak demand,” KBC said. “As a result, although some seasonal improvement in margins from spring into summer is anticipated, it is likely to be modest.”
The motor fuel’s crack in northwest Europe was at $10.61 a barrel today, up 29 percent since April 1, PVM data showed. In the U.S., the spread was at $27.11 a barrel, and is higher than its European counterpart due to the cheaper cost of West Texas Intermediate crude relative to North Sea Brent.
Gasoline futures for May delivery rose 1.28 cents, or 0.4 percent, to $3.37 a gallon on the New York Mercantile Exchange as of 1:45 p.m. London time. The national average gasoline price rose to $3.879 a gallon yesterday, according to AAA.
The following table lists ships booked in April to carry gasoline from Europe to the U.S. Atlantic Coast, according to Clarkson:
Ship Name Charterer Loading Quantity(tons)For the latest updates PRESS CTR + D or visit Stock Market news Today
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Stena Concert Petrobras April 8 37,000
Pacific Innovator Repsol April 12 37,000
Nord Integrity Not Reported April 11 37,000
Tambourin PMI April 10 37,000
Ainazi Clearlake April 13 37,000
Pacific Innovator Morgan Stanley April 16 37,000
CPO India Morgan Stanley April 16 37,000
Nord Sea Chevron April 17 37,000
Eagle Madrid Shell April 18 37,000
Seychelles Patriot Not Reported April 22 37,000
Stena Fr8 2 Eni April 25 34,000
NS Parade Not Reported April 27 32,000
Okhta Bridge Neste May 1 37,000
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