US Refined Product Imports to Increase

In a counter-intuitive report from Bloomberg News, a new survey of shippers indicates that gasoline exports from Europe to the US are set to increase by 18% over the next two weeks. The estimate is based on the number of tankers hired on the spot market to make the Rotterdam-to-New York trip.

The latest data from the US Energy Information Administration show that the US imported about 2.1 million barrels/day of refined products, of which about 715,000 barrels/day was finished motor gasoline. The US exported about 2.9 million barrels/day of refined products during the same period, of which about 626,000 barrels/day was finished gasoline. As so many energy analysts have noted, the US is now a net exporter of refined products. US exports of distillates, including diesel fuel, totaled 996,000 barrels/day last week, while US imports of distillates totaled 111,000 barrels/day.

The puzzling aspect of the Bloomberg report is that gasoline demand in the US is falling, so why would the US need to increase its imports? The most likely explanation is that the slump in demand from Europe is pricing these cargoes at an attractive rate, and making US buyers an offer that is too good to refuse. With tanker day rates now down -51% at about $10,000 since the beginning of the year, low tanker rates and cheap gasoline could be an attractive buy.

Paul Ausick