U.S. waterborne gasoline imports fell in October to their lowest since the COVID-19 pandemic, with European shipments to the U.S. Northeast hitting a record low and Asian cargoes more than halved from a year ago, according to traders and ship-tracking data.
The anemic flow to the top gasoline-consuming nation is showing signs of continuing this month amid weak demand and high production domestically, which could spell more trouble for global oil prices and refiners’ profits.
Crude prices are not far off three-year lows hit in September due to weak demand from China, the world’s second-biggest gasoline consumer, and refiners around the globe face a slump in profits to multi-year lows because of slowing economic growth and the rise in electric vehicles.
The U.S. imported 335,000 barrels per day (bpd) of gasoline in October, down 37% year-on-year and the lowest since April 2020, according to data from trade analysts Kpler.
So far this month, Kpler pegs imports at 365,000 bpd.
The sharpest drops in October waterborne deliveries were from Europe, the top gasoline shipper to the U.S., which fell to its lowest since the pandemic in May 2020 to 137,000 bpd, and from Asia, which slumped 74% from September to 21,000 bpd, less than half of last year’s average, according to Kpler.
The bulk of imports was from European refiners’ flow into the U.S. Northeast, which fell below 100,000 bpd last month, the lowest on record going back to 2016, according to vessel tracking data from Vortexa.
“November could be even lower,” Vortexa analyst Rohit Rathod said.
“No indication of recovery so far, with Europe losing out.”
WEAK EUROPEAN MARGINS, STRONG ASIAN DEMAND
European refiners are producing less gasoline because of weak profit margins and annual maintenance, FGE analyst Benedict Mangeolles said.
Benchmark Northwest European gasoline profit margins fell to below $6 a barrel on Nov. 18, a seven-week low, according to Reuters calculations.
The end of seasonal maintenance will increase European supply and, if prices fall, it may again become profitable to ship gasoline to the U.S., Mangeolles said.
“The arbitrage was largely closed until early November on the back of very bad economics from the EU,” Sparta Commodities analyst Jorge Molinero said.
Source: Reuters
