Bloomberg News

Asia Fuel Oil Losses Shrink; Shell Buys Naphtha: Oil Products

October 03, 2011

Oct. 3 (Bloomberg) -- Refiners’ losses from making fuel oil dropped to the lowest in almost 20 months. Royal Dutch Shell Plc bought a naphtha cargo in Singapore.

Fuel Oil

Fuel oil’s discount to Dubai crude shrank 65 cents, or 24 percent, to $2.06 a barrel at 2:20 p.m. Singapore time, according to PVM Oil Associates, a London-based broker. This discount is the smallest since Feb. 8, 2010.

The premium of 180-centistoke fuel oil to 380-centistoke grade rose $1.50, or 21 percent, to $8.50 a metric ton. This viscosity spread is the widest since Sept. 21, indicating bunker fuel prices have fallen more than higher-quality fuel oil.

PetroChina Co. sold 20,000 tons of 380-centistoke fuel oil to Hin Leong Trading Pte at $625 a ton, according to traders who monitored transactions on the Platts pricing “window” today.

Light Distillates

Shell, whose largest refinery was halted by a fire last week, also plans to shut its naphtha cracker at Pulau Bukom in Singapore, according to a person with direct knowledge of the matter.

The refiner bought 25,000 tons of naphtha for first-half December delivery from Glencore International AG at $871 a ton, the survey of traders showed.

Naphtha’s premium to London-traded Brent crude futures fell to $102.29 a metric ton at 5:45 p.m. Singapore time from $120.33 at the end of Asian trading on Sept. 30, based on data compiled by Bloomberg.

Middle Distillates

Gasoil’s premium to Dubai crude oil fell 23 cents, or 1.3 percent, to $18.07 a barrel at 2:20 p.m. Singapore time, PVM data showed. This crack spread, a measure of refining profit from the fuel, rose to $18.30 a barrel on Sept. 30, the highest since Sept. 1.

Jet fuel’s premium to gasoil jumped to $2.70 from $1.70 a barrel, according to PVM. This regrade was the widest since February.

--Editors: Mike Anderson, Christian Schmollinger.

To contact the reporter on this story: Ann Koh in Singapore at akoh15@bloomberg.net

To contact the editor responsible for this story: Paul Gordon at pgordon6@bloomberg.net


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