Bloomberg News

Shell Buys Gasoline, Naphtha Cargoes in Singapore: Oil Products

October 05, 2011

Oct. 5 (Bloomberg) -- Royal Dutch Shell Plc bought gasoline and naphtha in Singapore, where its biggest refinery remains shut after a fire. Fuel oil’s discount to crude widened for the first time in six days.

Light Distillates

Shell bought 95-RON gasoline in Singapore for a second day, according to a Bloomberg News survey of traders monitoring transactions on the Platts window. Shell, which declared force majeure Oct. 2 on some fuel exports from its Singapore refinery, paid $119 a barrel to Vitol Group for 50,000 barrels for Oct. 20 to Oct. 24, the earliest loading period. It paid the same price to BP Plc for a similar cargo for Oct. 23 to Oct. 27.

Shell, Europe’s largest oil company, also bought an open- specification contract for 25,000 metric tons of naphtha for first-half December from BP at $858 a ton, the survey showed.

Naphtha’s premium to London-traded Brent crude futures fell $7.31 to $96.37 a ton at 5:45 p.m. Singapore time, Bloomberg data showed. This crack spread, a measure of refining profit, was the narrowest since Sept. 15.

Fuel Oil

Fuel oil’s discount to Asian benchmark Dubai crude widened 74 cents to $2.73 a barrel at 2:35 p.m. Singapore time, according to data from PVM Oil Associates Ltd., a broker. The difference narrowed in the previous five days, indicating reduced losses for refiners turning crude into residual products.

Hin Leong Trading Pte bought 380-centistoke fuel oil in Singapore for a third day, paying $619 a ton to Brightoil Petroleum Holdings Ltd. and Vitol for 20,000 tons each, based on the Bloomberg News survey. The cargoes are for loading from Oct. 25 to Oct. 29.

The premium of 180-centistoke fuel oil to 380-centistoke grade dropped 25 cents at $7.25 a ton, PVM said. This viscosity spread narrowed for a second day, signaling higher-quality fuel oil has declined less than bunker, or marine fuel.

Middle Distillates

The premium of gasoil, or diesel, to Dubai crude slid 12 cents to $17.30 a barrel at 2:35 p.m. Singapore time, according to PVM data. This crack spread was the narrowest since Sept. 28, when a fire broke out at Shell’s Singapore refinery.

Jet fuel’s premium to gasoil decreased for the first time in five days, losing 15 cents to $2.65 a barrel, PVM said. This regrade on Oct. 3 reached $2.80, the highest since February, meaning it was profitable to produce aviation fuel over diesel.

--Editors: Mike Anderson, Christian Schmollinger.

To contact the reporter on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net

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


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