Tanker rates are increasing to the highest level in at least three years as a surge in U.S. refining boosts demand for ships to carry processed fuels to Latin America and the Caribbean.
Vessels carrying about 38,000 metric tons of refined fuels to Rio de Janeiro from Houston earned an average of $31,050 a day last week, according to data from Clarkson Plc. (CKN) That’s the highest since at least December 2010, when the world’s largest shipbroker began publishing the data.
The surge underscores how the U.S., which bans the export of most crude, is increasingly processing its abundance of the feedstock into fuels. Record numbers of vessels were hired last week to move oil products to Latin America and the Caribbean, according to Charles R. Weber, a shipbroker in Greenwich, Connecticut.
“The best option is to export,” George Los, an analyst at Weber, said by phone yesterday. “The export market has strengthened a bit not just from the fact that there’s more cargo to export but also from the fact the economics are making more sense than they had earlier in the year.”
Oil refineries in an area including the Gulf of Mexico processed 8.769 million barrels a day of crude in the week ended Nov. 28, U.S. Energy Information Administration data show. That’s the highest for the time of year since at least 1992. The area, known as Padd III, exported an average of 3.07 million barrels a day of petroleum this year, a record in data starting in 1981.
Record Charters
Traders booked 29 fuel shipments to Latin America and the Caribbean on medium range tankers last week, an all-time high, according to Weber. Fixtures to Venezuela rose “aggressively” owing to extensions to refinery halts which began last month.
Shipments to Europe on medium range tankers were up 40 percent from the weekly average for 2014, with traders booking seven ships, the broker’s data show. Traders booked 18 ships to other areas, also a record, according to the data.
The Organization of Petroleum Exporting Countries decided to keep oil output unchanged at a meeting in Vienna on Nov. 27. West Texas Intermediate crude was at a five-year low of $62.60 a barrel today in electronic trading on the New York Mercantile Exchange at 10:44 a.m. Singapore time.