US Gulf Coast-Northwest Europe freight rates were expected to move up Wednesday as the medium-range tankers list is reported getting tighter.

USGC-NWE freight rates gained Worldscale 12.5 Tuesday to be assessed at w92.5, basis 38,000 mt, with rise further.

The Energy Protector was heard on subjects at w92.5 to load 38,000 mt of refined oil product around September 1 from the USGC for a transatlantic voyage, while other fixtures on this route were reported at levels from w92.5-97.5.

"We heard rumors of high 90s on subs USGC-TA at the end of last week so I was not that surprised [by the rates rising]," said a shipping source Tuesday.

"Things are looking up on both sides [of the Atlantic]," a US-based shipbroker said. "A number of cargoes are being worked for early September dates now and I think we will see bigger numbers done for USGC-UKC by the end of [Tuesday]."

While USGC-NWE freight rates had remained stable between August 16 and August 23 at w80, basis 38,000 mt, shipping sources were pointing to a thinning tonnage in the US Gulf Coast for loading dates after August 26. "There is a distinct shortage of [MR] tonnage before the end of August," a shipowner said at the end of last week.

Diesel is traditionally exported from the US to Northwest Europe as demand is greater there. European imports of ultra low sulfur diesel from the US were heard at 1.5 million mt in August, holding steady month on month on continued prompt supply tightness in Europe, traders said earlier this month.

Traders attributed much of the export incentive to higher Renewable Identification Number prices. RINs, credits associated with every gallon of renewable fuel produced in the US, are purchased by refiners, importers and blenders to demonstrate to the Environmental Protection Agency they have fulfilled mandated government use of renewable fuels.