LONDON Dec 15 Tankers laden with diesel heading
from the U.S. Gulf Coast to Europe are turning around in
mid-ocean as European storage is nearly filled to the brim.
At least three 37,000 tonne tankers - Vendome Street,
Atlantic Star and Atlantic Titan - have made U-turns in the
Atlantic ocean in recent days and are now heading back west,
according to Reuters ship tracking.
It is unclear if the tankers will discharge their diesel
cargoes in the Gulf Coast or will await new orders, according to
traders and shipping brokers.
"European prices are so soft," one trader said. "Sellers
must see better numbers."
The Vendome Street was more than three quarters of the way
to Europe, turning around just 800 miles off the coast of
Portugal. Ship brokers said a turnaround so late in the journey
would come at a cost to the charterer.
European diesel prices and refining margins have collapsed
in recent days to six-year lows as the market has been
overwhelmed by imports from huge refineries in the United
States, Russia, Asia and the Middle East.
At the same time, unusually mild temperatures in Europe and
North America further limited demand for diesel and heating oil,
ptting even more pressure on the market.
Gasoil stocks, which include diesel and heating oil, in the
Amsterdam-Rotterdam-Antwerp storage hub climbed to a fresh
record high last week.
Prompt Low Sulphur Gasoil futures, the European
diesel benchmark, have been trading at sharp discount to later
contracts, in what is known as contango, prompting traders to
In some cases, traders opted to store product on tankers. At
least 250,000 tonnes of diesel are currently anchored off Europe
and the Mediterranean seeking a discharge port, according to
"The idea is to keep tankers on the water as long as you can
and try to find a stronger market," a trader said.
(Editing by William Hardy)