Mild winter weather in the US Northeast is allowing traders to send a seasonally rare high sulfur diesel cargo from the Atlantic Coast to Europe, according to market sources.
The cargo will be a 400,000-barrel load on the tanker Cape Troy, sources said. The Panamax is slated to load Saturday, according to the Platts' vessel tracking software cTrack.
It is fairly rare for high sulfur diesel, used as heating oil, to leave the Atlantic Coast in February.
"We've had a situation this year where [Europe] had an extremely cold winter and we've had a milder-than-normal winter," one USGC trader said. "So that's what opened up the opportunity. I consider [this] an abnormal move for this time of the year."
The weather is also pulling barrels from the US Gulf Coast. This month 150,000 mt of high sulfur diesel has either fixed or shipped from the Gulf Coast to Europe, Platts reported Wednesday.
Heating oil stocks in the Atlantic Coast are already relatively low this year. Regional stocks are down 21% from this time last year at 23.1 million barrels, according to Wednesday's Energy Information Administration report.
Platts' five-day rolling average has Atlantic Coast heating oil barges at $3.1836/gal, the Gulf Coast pipeline at $3.1413/gal, the Mediterranean CIF market at $3.2454/gal and Rotterdam barges at $3.2002/gal. Current shipping rates for a trip to Europe are roughly 3.94 cents/gal.
