SINGAPORE (Reuters) – Low water levels on the Rhine river have caused a fuel supply deficit in parts of Europe’s industrial heartlands that is sucking up cargoes from more than 10,000 km away in Singapore. Following a long, scorching summer, water levels on the Rhine – a key commodity shipping lane connecting industrial centers in Switzerland, Germany, France and the Netherlands to major seaports – fell to record lows, limiting the transport of coal, steel, grains and fuel. That has created a shortage of heating oil heading into the European winter, pushing up the market and triggering a search for supplies from as far away as Southeast Asia, where there is ample fuel and gasoil prices are low. Northwest European prices for gasoil hit a record $35-per-ton premium over Singapore values for November fuel deliveries, and December premiums are still above $20 a ton. That means gasoil could be pulled into Europe from Southeast Asia via arbitrage trades through the end of the year. “The wide arb means it’s possible to shift gasoil to the West (Europe) at a profit,” said Sukrit Vijayakar, director of Indian energy consultancy Trifecta, adding that the situation stemmed from the low Rhine water levels… continue reading
Continue reading Butterfly effect: Low EU river stirs fuel market 10,000 km away in Singapore. This article appeared first on CTRM Center.
Source: CTRM Center