March 12, 2019 / 7:59 AM / 2 months ago

Trafigura shipping about 1 mln barrels of Asian gasoline, blendstocks to S.America -source

* Crude tanker transporting Asian gasoline to S.America -sources

* Unusual to ship gasoline on crude tankers

* Comes at time of tighter supply amid refinery maintenance

* Trafigura declines to comment on issue

By Seng Li Peng

SINGAPORE, March 12 (Reuters) - Commodity trader Trafigura is shipping gasoline and gasoline blendstocks to South America from Asia in a crude tanker, according to trade sources, with one of them saying the cargo was around 1 million barrels.

The unusual move comes at a time when gasoline supply is tightening in the destination region due to maintenance at refineries in places such as the United States and Europe.

Ship tracking data from Refinitiv shows the newly-built ‘Marlin Swan’ crude Suezmax vessel is en route to Balboa in Panama from Yeosu in South Korea.

The five sources, who closely track gasoline shipments, said the vessel was sent by Trafigura. The global oil trader declined to comment on the issue.

New tankers can transport gasoline as long as they have never been loaded with crude. Once crude is put in, they are not typically used to carry cleaner fuels such as gasoline, gasoil or jet fuel as crude is a ‘dirtier’ product.

Some of the sources said that Trafigura has been storing low-sulphur gasoline and blending components, sourced from different parts of Asia, in South Korea for more than two months, and that it has gasoline tanks in the Americas.

Gasoline markets had been unusually weak across Europe, the United States and Asia in the weeks up to late-February due to oversupply, with Singapore’s gasoline margins to Brent crude mostly languishing at discounts.

But the tide changed in late February partly due to maintenance at refineries in the United States, Europe and Asia.

Asia’s gasoline crack, or profit-margin, neared a five-month peak of $5.48 a barrel on Monday, while NYMEX gasoline futures in the United States settled at their highest since Oct. 23 at $1.826 a gallon.

“The strength of gasoline is the talking point now due to demand in Asia, and gasoline going to Panama could play a role,” said an oil products trader.

“It’s almost always price driven,” the trader said, adding that prices dictate where cargoes go.

However, analysts were not optimistic that the current strong market for gasoline would last.

“There is still a big question mark over whether this is sustainable or is simply another temporary cycle; we would lean towards the latter ... as estimated maintenance numbers have declined,” consulting firm JBC said in a note last week.

Moody’s on Monday said that it did not expect gasoline fundamentals to improve, with gasoline demand in some countries likely to decline in the long-term amid increasing fuel efficiency and biofuel consumption.

Reporting by Seng Li Peng; Additional reporting by Roslan Khasawneh; Editing by Joseph Radford

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