Bloomberg News

Shell Buys Naphtha, Gasoil Cargoes in Singapore: Oil Products

October 10, 2011

Oct. 10 (Bloomberg) -- Royal Dutch Shell Plc bought naphtha and gasoil in Singapore, where the company is resuming some operations at the Pulau Bukom refinery after a Sept. 28 fire.

Light Distillates

Shell bought naphtha for first-half December at $874 a metric ton, according to a Bloomberg survey of traders monitoring transactions on the Platts window. The seller was Glencore International AG, which sold three times in the previous two days.

Naphtha’s premium to London-traded Brent crude futures declined $5.88 to $68.42 a ton at 5:45 p.m. Singapore time, based on Bloomberg data. This crack spread, a measure of refining profit, was the narrowest since July 7.

Middle Distillates

Vitol Group sold 150,000 barrels of gasoil, or diesel, with 0.5 percent sulfur to Shell in Singapore at $2 a barrel over October quotes, according to the Bloomberg survey. The Geneva- based trader also sold a similar-sized cargo with 10 parts-per- million of sulfur to BP Plc at $2.60 over benchmark quotes.

Gasoil’s premium to Asian marker Dubai crude fell 65 cents to $16.60 a barrel at 2:25 p.m. Singapore time, based on data from PVM Oil Associates Ltd., a broker. This crack spread was the narrowest since Sept. 28.

Jet fuel’s premium to gasoil rose 5 cents to $2.50 a barrel, PVM said. This regrade last week climbed 44 percent, the most since May, indicating it is more profitable to produce aviation fuel over diesel.

Fuel Oil

Brightoil Petroleum Holdings Ltd. bought 20,000 tons of 380-centistoke fuel oil from BP in Singapore at $7.25 a ton over benchmark quotes, according to the Bloomberg survey. Hin Leong Trading Pte purchased a similar-sized cargo of 180-centistoke grade from Vitol at a $6 premium to October quotes.

Fuel oil’s discount to Dubai crude narrowed 8 cents to $4.22 a barrel at 2:25 p.m. Singapore time, according to PVM. The gap increased 58 percent last week, the most since February 2010, meaning refiners’ losses from turning crude into residual products was growing.

The premium of 180-centistoke fuel oil to 380-centistoke grade gained 25 cents to $8 a ton, based on PVM data. A widening viscosity spread signals higher-quality fuel oil has decreased more than bunker, or marine fuel.

--Editor: Christian Schmollinger, Mike Anderson.

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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