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Crude oil cargoes delivered to the UK from the U.S. Gulf Coast bounced back from a five-week low, with week-on-week delivered crude oil cargoes into the UK up by around 1 million barrels in the week to October 26, data from S&P Global Platts Analytics showed on Tuesday.
Crude oil cargoes from the U.S. Gulf Coast delivered into the UK included two cargoes of 536,000 barrels and one cargo of 501,000 barrels, all of which were delivered in Liverpool.
Yet, despite the rise of U.S. Gulf Coast cargoes delivered to the UK, total crude cargoes that arrived in northwest Europe in the week to October 26 were down 262,000 barrels week on week to a total of 2.104 million barrels, according to S&P Global Platts.
In recent weeks, demand for crude in the region has declined amid Fall refinery maintenance and surging freight rates.
Freight rates for Aframaxes started to increase in early October, and the rates for the USGC-UK Continent route also steadily increased until Friday last week, when the freight rates on the USGC-UK Continent route dropped for the first time since October 5, according to Platts data.
Platts fixture logs show that a total of 22 Aframax vessels have been booked so far in October for the USGC-Europe route, up from 15 cargoes last month and from 12 vessels in August.
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U.S. Gulf Coast crude oil exports to all destinations have been slowing in recent weeks due to arbitrage constraints because of surging freight rates, S&P Global Platts reported last week, citing market participants’ expectations of 1.7 million bpd-1.8 million bpd of exports for November.
Freight rates started to increase early in October for all ship classes, with rates trending higher due to routes delayed by weather, more lightering activities, and increased ship movement between Mexico’s east coast and the U.S. Gulf Coast.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.