European transatlantic gasoline tanker bookings surge in May

Gasoline tanker bookings from Europe to the United States have surged in May as traders have bet U.S. demand will grow in the summer driving season, despite high inventory levels.
A rare flow of gasoline and diesel from Europe to Argentina in recent weeks has further propped up transatlantic clean shipping rates, which hit a three-month high this week.
Around 28 tankers each carrying 37,000 tonnes gasoline plus at least three more with naphtha, used for blending, have been booked from Europe mainly to the U.S. East Coast since the start of May, according to shipping fixtures and traders.
Another two vessels with gasoline were booked for Mexico for a total of at least 33 across the Atlantic.
This compares with a monthly average of 20 to 30 vessels, carrying the equivalent of 310,000 barrels, from Europe across the Atlantic in recent years.
The exports, or arbitrage, come before any increase in U.S. demand, while gasoline stock levels are high.
But Europe is saddled with oversupply, with gasoline inventories near a five-year high. European refiners are offering gasoline at low rates as they seek outlets for the excess stocks.
"The U.S. is really the only option, where else can all these cargoes go?" a trader said.
The U.S. benchmark gasoline futures contract, known as RBOB, officially switched from winter to summer grade on May 1.
"The arbitrage was open in response to demand for summer-grade specification kicking in last week," another trader said.
The United States also turned to imports after a power outage at the Motiva Enterprises 600,000 bpd Port Arthur, Texas refinery on April 14, which affected two other refineries in the region and created a shortage of refined products.
"Demand in the U.S. Gulf Coast was very strong, allowing cargo movement into Florida, and Europe is simply too long," a trader said.
Shipping rates on the TC2 route between Europe and the East Coast rose on Thursday to $19,817 a day, their highest since Feb. 12, Baltic Exchange data showed.
Gasoline stocks on the East Coast dipped over 180,000 barrels during the week to May 3 but remained 7.8 million barrels over levels seen this time last year, according to U.S. Energy Information Administration (EIA) data.
Gasoline imports into the region, known as PADD 1, have averaged 551,000 barrels per day in 2013, 7.4 percent lower than the average weekly rate throughout 2012.
Source: Reuters