Asian spot freight rates rise as traders move jet fuel to US

(SINGAPORE) Asian spot freight rates for intra-Asian clean tanker loadings rose yesterday as traders jumped into the market to try to move jet fuel from the region to the US West Coast. Rates for medium-ranged (MR) tankers for spot bookings on the TC4 route rose five points to W235 levels over last Thursday's Asian close and was unchanged versus Friday's Baltic Exchange settlement. 'The arbitrage for jet (fuel) looks to be open, and we should expect traders to start booking in their shipping this week,' a Singapore-based shipbroker said. Most business is expected to get done over the next three days, before Singapore takes a break on Thursday for National Day. Yesterday, shipbrokers reported that the MR tanker Sunny Express was provisionally booked to load a 30,000 tonne clean petroleum cargo on Aug 15. The loading is slated to take place in South Korea, with the discharge set for the US West Coast. 'It's hard to say, but there is a possibility that this could very well be jet, as it would seem to make no sense to be moving gasoline over now,' a shipbroker said. The US summer driving season is almost over, and the market is now focusing on winter fuel stocks. While US oil data showed that distillate stock levels rose 2.8 million barrels to 126.5 million barrels in the week ended July 27, traders and shipbrokers are eyeing the hurricane season, which enters its peak period in August. 'Last year, there weren't that many disruptions during August through October, but forecasters are saying otherwise this year,' a shipbroker said. In 2005, when Hurricane Katrina hit the US Gulf Coast, wiping out a significant portion of production capabilities, demand for clean tonnage jumped as traders looked to move products into the US. But no hurricanes hit the US last year. Tropical storms become hurricanes when their top winds reach 119 kmh. A Colorado State University team led by forecasting pioneer Bill Gray has predicted 17 Atlantic storms this year, with nine becoming hurricanes and five reaching intense strength. But last week, the team trimmed their forecast down to 15 tropical storms, with eight seen to grow to hurricane strength, including four major hurricanes. -- Reuters