Five Jet Fuel-Laden Tankers Divert Via Cape to Europe
Five tankers laden with jet fuel and tracked heading for Europe are transiting via the Cape of Good Hope instead of the usual route via the Suez Canal from the Far East or Middle East Gulf.
The SKS Donggang (90kt, Noble), STI Vento (95kt, Vitol), STI Savile Row (90kt), Torm Valborg (90kt) and Southport (90kt, Total) are all reportedly chartered to ship jet fuel to Europe, according to OPIS Tanker Tracker. They will be arriving between the next 11 days to three weeks, vessel-tracking data show.
The voyage via the Cape of Good Hope extends the 30-day shipment on the Long Range Two product tankers by 21 days, and is noted during a period of market volatility for the middle distillate.
Northwest Europe jet fuel prices are at six-year lows, with a steep contango in the futures market supporting storage, amid jet barge cracks in northwest Europe that have been persistently lower than diesel for more than two months.
The route via the Cape of Good Hope is rarely seen for product tankers but Vitol, Shell and Noble are among traders that have been seen adopting strategies to take advantage of the spread of more than $40 per metric ton between August and second-quarter 2016 future prices.