NY-Bound Diesel Cargo Diverts to Europe, where Prices Reach 11-Week High

A New York-bound cargo of low-sulfur gasoil on board the product tanker Raysut is now diverting to Amsterdam midway across the Atlantic, as prices for diesel cargoes in northwest Europe surge to an 11-week high.

The Long Range 2 tanker, carrying a 90,000-ton (670,500 bbl) cargo of ULSD, loaded at the United Arab Emirates port of Ruwais around Jan. 27 and shortly afterwards first signaled it would be heading for Amsterdam, according to the OPIS Tanker Tracker.

In mid-February, after sailing around the Cape of Good Hope, instead of making the shorter voyage via the Suez Canal, the ship changed course and instead signaled it was now heading for New York.

However, on March 6, just days away from New York, the vessel again diverted and turned around midway across the Atlantic. It's now signaling that it will arrive in Amsterdam in six days, according to information compiled from traders, brokers and satellite tracking data.

It's not known who controls the vessel, though shipbrokers have recorded that Litasco, the trading arm of Lukoil, chartered the vessel from Jan. 27, with options to go to northwest Europe. That was the day that vessel satellite-tracking data showed the ship loaded its diesel cargo at Ruwais.

Diesel cargo differentials -- the premium paid over the low-sulfur gasoil futures in northwest Europe assessments -- sharply gained on Friday, pushing the outright price to the highest in nearly 11 weeks.

Premiums that averaged a $2.89 per metric ton in February rose to $6.25 on Friday, up from $2.25 the prior day. The outright price of ULSD in northwest Europe is now at $343 per ton, the highest price since Dec. 11, according to OPIS assessments.

The April futures price is at $347.50, OPIS calculations show.

The Raysut's cargo was the first known shipment of diesel from the Middle East Gulf that's been seen heading for New York, since two new refineries came on line in the prior two years and the Ruwais refinery was upgraded last year.

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