Europe lures rare diesel cargoes from US East Coast
LONDON/NEW YORK (Reuters) -- US East Coast refineries are stepping up exports of diesel despite a regional deficit of the fuel as strong overseas demand, particularly in Europe, is proving more profitable.
Two tankers carrying 60,000-t cargoes of diesel have been booked in recent days out of New York Harbor to go to Northwest Europe, traders said.
The two vessels, River Shiner and Two Million Ways, were chartered by Swiss-based trading house Trafigura and will load fuel sold by Delta Air Lines Inc's refiner subsidiary Monroe Energy, near Philadelphia.
They are expected to top up their cargo in New York before sailing to Europe, an East Coast trader said.
The BP-chartered, 37,000-t Arctic Breeze is nearing its destination—Sete port in southern France—after loading a diesel cargo this month at the Kinder Morgan terminal in New York, according to traders and Reuters shipping data.
At least one other 37,000-t tanker has been booked on the transatlantic route, traders said.
US Gulf Coast refineries have become a powerhouse of distillate exports amid a rise in demand from Latin America and West Africa due to refinery outages there.
While Europe historically relies on a steady stream of diesel from the US Gulf Coast, the rise in competition has led to a marked drop in that region's diesel exports to Europe.
The US East Coast typically imports middle distillates, including diesel and heating oil, to meet regional demand. Over the past year, the region imported an average of around 180,000 bpd of distillates, according to the US government's Energy Information Administration.
Although it is not unusual to see exports of heating oil from the East Coast during the warmer summer months, diesel exports are more rare.
European diesel refining margins have risen in recent weeks as imports from the US Gulf Coast, Asia and the Middle East slowed due to seasonal refinery maintenance.
At the same time, high refinery maintenance in Europe, particularly inland markets such as Germany, has led to lower regional production.
Reporting by Ron Bousso and Jarrett Renshaw; Editing by Dale Hudson
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