Shipping/Commodities: "Gasoline Cargoes Traveling 16,000-Mile Reveal Dysfunctional Trade"

From Bloomberg via gCaptain:

Summer is coming to Europe and that can only mean one thing. It must be time to send the continent’s excess gasoline halfway across the planet.

At least 400,000 metric tons of gasoline have been shipped or booked for delivery to Australia from northwest Europe since the start of this year, according to shipping data compiled by Bloomberg. Over 10,000 tons of marine fuel will probably be consumed to transport these cargoes just on one leg of the journey, more than some refineries produce in a day.

While the precise motives for the trades are unlikely to become known, such cargoes could make sense because of the onset of Europe’s summer, which means switching to gasoline that’s more suited to warmer temperatures. That requires any excess stockpiles of winter-grade product to be cleared. Nonetheless, the cargoes also highlight the challenges Australia faces to supply itself or source alternative inventories more locally.

“Europe is very, very long gasoline and there’s fierce competition for homes, whether it’s in the U.K., or whether it’s in the U.S. or Canada or West Africa,” said John Spencer, founder of consultancy Red Red Kite, who has more than three decades experience in trading refined fuels. “People will do odd things” when they need to find markets for the fuel.

It’s impossible to make an external judgment on how profitable the shipments would be because there are too many variables involved, Spencer said. There are financial advantages to making winter gasoline in Europe’s summer and shipping it to Australia, he said....MORE