U.S.-Europe September Diesel Flows Rise as Russian Exports Forecast Lower
September volumes of ultra-low-sulfur diesel tracked to Europe from the U.S. Gulf and Northeast coast are tallied so far at just over 1 million metric tons on 25 tankers, according to the OPIS Tanker Tracker.
The number is already above the monthly average of just over 942,000 tons of U.S.-Europe ULSD exports seen January through June, based on data from Eurostat, the European Commission's statistics agency. Of that 1-million-ton figure, about 200,000 metric tons is so far classified as doubtful or unconfirmed as the
vessel has yet to load and depart for Europe on dates indicated.
Further vessels are also likely to be identified as being chartered for loading from the Gulf over the next 14 days to make the two-week voyage to Europe, and thus swell the final tally.
The higher-than-expected volumes come amid expectations that refinery turnarounds in Russia, the largest supplier of ULSD to Europe, will curb exports from the federation this month.
Europe's 28 member countries imported 1.2 million metric tons of ULSD from Russia in August, lower than the 1.6 million tons seen in July, according to OPIS Tanker Tracker data. The Eurostat average for the first six months of 2015 is 1.4 million tons from Russia. So far, 722,000 metric tons is tracked as being
shipped from Russia this month.
Energy Aspects, a London-based consultancy, said refinery outages in the U.S. Midwest amid continued Latin American demand had limited spot diesel shipments to Europe from North America, and on top of the Russia shortfall, possibly leading to a "small stockdraw" in European diesel in September.
Russia and the U.S. supplied Europe with about 85% of its 37 million tons of imported diesel last year.
Gasoil futures spreads tend to lend support to these forecasts of tighter diesel balances. The October low-sulfur gasoil future trading on London's ICE exchange yesterday settled $5 higher in value than the soon-to-expire front-month contract.
Total volumes of diesel exported to Europe were tracked at 2.809 million tons in August, compared to 3.339 million tons in the prior month, based on the OPIS Tanker Tracker data. September's overall tally is so far estimated at nearly 2.6 million tons.