No Relief in Sight at Gas Pump

U.S. gasoline prices jumped 6% in February, and market experts predict they will climb higher because critical refining operations in the Northeast are shutting down.
From New York to Philadelphia, refineries that turn oil into gasoline have been idled or shut permanently because their owners are losing money on them.

Sunoco Inc. is expected to close the region’s largest refinery in July, taking another 335,000 barrels per day in production capacity off the market.

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Trucks Run on Natural Gas in Pickens Clean Energy Drive

Using natural gas could cut fuel costs by more than $20,000 for a truck traveling a typical long-haul distance of 100,000 miles (161,000 kilometers) a year, according to JMP Securities LLC’s Shawn Severson. Shares in Clean Energy and Westport are up at least 30 percent since the end of last year.

“Natural gas is green in terms of the environment, but the real green is in the money,” said Severson, a San Francisco- based clean-technology analyst. “If you do not have this fuel in your fleet for whatever percentage is appropriate, you’re going to be at an economic disadvantage.”

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Container Rates Rising 28% as Cargo to U.S. Rebounds From Decline

The cost of moving a loaded forty-foot steel box to the West Coast from China was last at $1,824, from $1,418 on Dec. 16, Clarkson data show. That’s still 5.6 percent lower than a year ago after a capacity glut drove rates down as much as 30 percent in 2011. Average costs to charter ships carrying 4,400 twenty-foot boxes for six to 12 months will rise to $18,000 a day this year, from $8,700 in 2011, according to Morgan Stanley.

Container rates on the world’s biggest international trade route are rallying after U.S. imports of manufactured goods rebounded from the first decline in two years.

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Baltic Dry Index falling steadily

The Baltic Dry Index – an index of global freight rates for shipping dry commodities such as iron ore, coal and grain – had fallen for 23 consecutive days as of last Friday, cutting its value in half in the space of a month. The last time the index was this low, the world was in the depths of a credit crisis and a major recession.

While the Baltic Dry Index is obscure to your average retail investor, keen market watchers have long considered it a valuable leading indicator for the world economy, indicating shifting tides in demand for key industrial commodities.

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Scrapping Record Fails to End ‘Nightmare’ for Shipowners: Freight Markets

Rates will remain below about $11,000 a day for the rest of the year, compared with a breakeven point of about $23,000, according to Johnson Leung, head of regional transport at Jefferies Group Inc. in Hong Kong.

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Gasoline prices up 40% this summer, U.S. says – MarketWatch

Retail prices for a gallon of regular-grade gasoline will average $3.86 from April through September, up from $2.76 for the comparable period last year, said the Energy Information Administration, the statistics arm of the Department of Energy.

In some areas, monthly average prices could top the national average by at least 25 cents a gallon.

“The continuing economic recovery tends to boost gasoline and diesel fuel consumption, while the effect of higher retail prices tends to dampen it,” according to EIA. “These counterbalancing forces are expected to be prominent features of the summer driving season.”

According to AAA’s daily fuel-gauge report, the national average price for a gallon of regular gasoline is about $3.79, up about 33% from $2.86 a year earlier

via Gasoline prices up 40% this summer, U.S. says – MarketWatch.

Tanker Rates Doubling on Lower Speeds, Libya: Freight Markets – Bloomberg.com

Supertanker owners are coping with the second-highest fuel costs on record by sailing ships at the slowest speeds in at least three years, reducing vessel supply and bolstering charter rates.

An empty supertanker burns about 90 metric tons of fuel, known as bunkers, a day when traveling at 14 knots, according to Riverlake Shipping SA, a broker in Geneva. Hamilton, Bermuda- based Frontline, the world’s biggest supertanker operator, can cut that to about 25 tons when sailing at 10 knots on the empty leg of a journey, said Jens Martin Jensen, chief executive officer of the company’s management unit in Singapore. That means saving about $42,000 a day at the global average price.

The combination of what the industry calls ultra-slow steaming and violence in Libya, Africa’s third-biggest oil producer, more than doubled daily returns for owners to $32,089 since the end of February, according to the London-based Baltic Exchange, which assesses more than 50 maritime routes. Traders of forward freight agreements, used to bet on or hedge shipping costs, anticipate the gains will last, with second-quarter contracts at $28,894.

via Tanker Rates Doubling on Lower Speeds, Libya: Freight Markets – Bloomberg.com.

Record Gasoline Grips Europe While California Faces $4 a Gallon – Bloomberg.com

Gasoline prices are setting records across Europe and exceeding $4 a gallon in California as the rise in crude oil caused by the conflict in Libya punishes companies and consumers.

Households are cutting back on travel, cinema visits and groceries in the U.K., where prices jumped to 130.68 pence a liter ($8.06 a gallon) yesterday, according to research from the Automobile Association, Britain’s largest motoring organization. Prices set records in the Netherlands and Italy today. The current average U.S. gasoline price is near a two-year high at $3.81 a gallon, according to the AAA website.

via Record Gasoline Grips Europe While California Faces $4 a Gallon – Bloomberg.com.

Korea Line Files for Receivership as Bulk Rates Fall (Update1) – Bloomberg.com

The Baltic Dry Index, a measure of rates for vessels used to ship iron ore, coal and other commodities, fell 1.8 percent yesterday to 1,345, the lowest since Feb. 4, 2009.

Korea Line Corp., South Korea’s second-largest operator of dry-bulk ships, filed for receivership after a global oversupply of vessels caused rates to tumble to the lowest in almost two years.

via Korea Line Files for Receivership as Bulk Rates Fall (Update1) – Bloomberg.com.

Freight Rates Tumbling as 35-Mile Line of Ships Sails

Shipping lines carrying raw materials are set for the lowest freight rates since 2002.

Jan. 10 (Bloomberg) — At a time when analysts anticipate record profits for the biggest mining companies and a third year of gains in commodity prices, shipping lines carrying raw materials are set for the lowest freight rates since 2002.

Leasing costs for capesizes, 1,000-foot-long ships hauling iron ore and coal, will drop 34 percent to average $22,000 a day this year, according to the median in a Bloomberg survey of eight fund managers and analysts. The last time that happened, China’s economy, the biggest consumer of the minerals used in steel and power, was 75 percent smaller and the benchmark Standard & Poor’s GSCI commodity index 67 percent lower.

via Freight Rates Tumbling as 35-Mile Line of Ships Sails (Update2) – Bloomberg.com.