Bloomberg News

Diesel Rises in Europe; BP Buys Jet Fuel Cargo: Oil Products

September 30, 2011

Sept. 30 (Bloomberg) -- Diesel premiums to gasoil in Europe rose as Royal Dutch Shell Plc shut its Singapore refinery following a fire that lasted two days. BP Plc and Total SA were buyers in the jet fuel market.

Gasoil traded on London’s ICE Futures Europe exchange decreased as crude fell. Front-month heating oil futures prices are 9 percent lower than a month ago. Gasoline declined.

Light Products

Gasoline for immediate loading traded from $903 to $912 a metric ton, according to a survey of traders and brokers monitoring the Argus Bulletin Board. That compares with deals yesterday from $928 to $933. Prices are 13 percent lower than at the end of August.

Stockpiles of the fuel dropped 21 percent to 428,000 tons in the week to yesterday as cargoes were shipped to Benin, Brazil, Mexico and Libya, according to data by PJK International BV, a researcher based in the Netherlands. That’s the lowest level since Nov. 14, 2003, Pieter Kulsen, founder of the company, said by phone from Oosterhout.

Gasoline’s premium to Brent narrowed to $5.69 a barrel from $6.29 yesterday, according to PVM Oil Associates Ltd., a crude and refined products broker in London.

Naphtha’s discount to Brent widened to $3.32 a barrel from $2.96 yesterday, according to PVM.

Middle Distillates

Diesel barges gained, trading twice at $41 a ton premium to the October gasoil contract, according to a survey of brokers and traders monitoring the Platts pricing window which ends at 4:30 p.m. London time. That compares with a deal yesterday at a $36.50. Hetco, a unit of Hess Corp., bought from Mercuria Energy Trading SA.

BP bought a jet fuel cargo from Morgan Stanley, part of which was priced at a premium of $84 a ton to October gasoil, according to the survey.

Total purchased a jet fuel barge at a premium of $83 a ton to the gasoil contract, the survey showed. That compares with barge trades yesterday at $80 and $83 more than gasoil.

Gasoil for October dropped 1.8 percent to $882.50 a ton as of 5:09 p.m. London time on the ICE exchange. The November contract fell 1.8 percent to $878.25 a ton. The low-sulfur grade closed today at $891 a ton, without trading, according to ICE data on Bloomberg. That compares with yesterday’s settlement of $906.75 for delivery in January.

Gasoil’s crack, a measure of refining profitability, narrowed to $15.06 a barrel from $15.47 yesterday, according to ICE data. Front-month Brent declined 0.9 percent to $103.02 a barrel on the ICE exchange.

A gasoil barge traded at a discount of $3 a ton to the October gasoil futures contract, according to the survey of Platts. That’s in line with yesterday.

Residues

Low-sulfur fuel oil fell, trading at $618 a ton versus $626 yesterday, according to the survey of Platts. High-sulfur grade traded at $598 to $602 a ton compared with $600.25 to $608 yesterday.

Refineries

The fire at Shell’s refinery in Asia was extinguished late yesterday. “We are progressively shutting down the refinery over the next two days” as a precaution, not because of damage, Martijn van Koten, vice-president for eastern manufacturing operations, said yesterday at a press briefing. The Singapore refinery can process 500,000 barrels of crude a day, according to data compiled by Bloomberg.

--Editors: Raj Rajendran, Rob Verdonck.

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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