U.S. arctic cold draws rare tankers of heating oil

LONDON (Reuters) - Freezing weather across the U.S East Coast has drawn a number of tankers carrying diesel and heating oil from Europe, reversing a traditional trade route.

FILE PHOTO: A woman stops to photograph the frozen Josephine Shaw Lowell Memorial Fountain in New York, U.S., January 3, 2018. REUTERS/Lucas Jackson

The Pacific Anna set sale this week from the Gibraltar straits to the storage hub of St Croix in the Caribbean with a 90,000 tonne cargo of diesel it had loaded in Saudi Arabia in December, according to Reuters AIS ship tracking.

Similarly, trading house Vitol chartered the 60,000 ton Amalia to deliver diesel from the Baltic port of Primorsk to St Croix, where it is expected to discharge on Jan. 15, according to shipping data and tracking.

“The cold weather is drawing barrels,” a European diesel trader said.

Oil products stored at St Croix are typically sold into the United States, traders said. The cargo might be blended with other components to meet the U.S. winter specifications for heating oil, they added.

A third cargo, STI Donald C Traus has also been booked by Gazprom from Primorsk with options to go on the transatlantic route.

The United States has in recent years become a major exporter of refined oil products, supplying large volumes of diesel to Europe, where regional refineries can not meet local demand.

But an Arctic front that hit eastern United States has led to a sharp rise in demand for diesel, used in many states for heating, offering traders what is known as a reverse arbitrage.

Another major winter storm is set to hit the region on Wednesday with freezing rain, snow and strong winds, demand was expected.

Several other traders are seeking to deliver cargoes on the west-bound transatlantic route, traders said.

Vienna-based consultancy JBC Energy estimated demand for heating oil in the United States will rise by 90,000 barrels per day in January and February compared to a year earlier.

To view a graphic on Pacific Anna, click:

Additional reporting by Jessica Resnick-Ault in New York, editing by David Evans