Freight
Market Overview
Freight - Dirty Outlook
TD25 freight remains weak. Prompt Aframax supply in the USGC remains widely available, with vessel supply outpacing demand and keeping downward pressure on rates.
Arb economics offer mixed signals; WTI's landed competitiveness into Europe provides a degree of support for USGC-origin cargoes, though this has yet to translate into fixing activity.
Overall, prompt freight fundamentals favour charterers, who should look to hold off on booking near-term as rates are likely to continue softening. However, WTI's pricing into European destinations remains a credible catalyst for a partial recovery in the coming days.
Similarly, TD22 freight remains weak. Vessel supply outpacing the 90-day demand average by one VLCC, with WTI at a structural discount to competing grades, points to continued rate weakness on the route.
Arb economics offer limited support, as the WTI discount to alternative crude grades reduces charterer incentive to fix USGC-origin cargoes. Vessel oversupply relative to seasonal norms compounds the bearish outlook.
Overall, the combination of soft demand fundamentals and grade competition leaves TD22 rates under pressure near-term.
Freight - Clean Outlook
Prompt tonnage long but stabilizing, 18 ships vs 90-day average of 13. Two-week fixing and failing cycle recycled failed ships to the front of the list as FSD model forecasts rates flat at 155 WS into 25 May to 3 June.
Arb economics support higher rates, Houston to Rotterdam diesel +$13.50/mt, best-margin NWE destination today; Buenos Aires +$16.75 cpg, Santos +$4.25 cpg; arbs workable across Europe, ECSA, and West Coast South America simultaneously.
US diesel inventory pressure growing as stocks remain at low levels despite weekly build. USGC remains world's marginal diesel exporter with modest FE export competition at the margin.
Later down the curve, open arb economics across multiple destinations support recovery.
