Bloomberg News

Morgan Stanley Buys Jet Fuel at Reduced Premium: Oil Products

October 20, 2011

Oct. 20 (Bloomberg) -- Morgan Stanley bought jet-fuel cargoes at a reduced premium in Singapore, Asia’s biggest oil- trading and refining center. Hin Leong Trading Pte extended its purchases of fuel oil.

Light Distillates

Vitol Group bought two 50,000-barrel cargoes of 92-RON gasoline from BP Plc in Singapore, according to a Bloomberg survey of traders monitoring transactions on the Platts window. The Geneva-based trader paid $118.50 a barrel to load between Nov. 6 and Nov. 10.

Royal Dutch Shell Plc bought a 25,000 metric-ton, open- specification naphtha contract for second-half December from Mabanaft BV at $884 a ton, the survey showed.

Naphtha’s premium to London-traded Brent crude futures dropped $29.74 to $59.90 a ton at 5:45 p.m. Singapore time, based on data compiled by Bloomberg. This crack spread, a measure of refining profit, is the narrowest so far this week.

Middle Distillates

Morgan Stanley bought two jet-fuel cargoes in Singapore, according to the Bloomberg survey. Hin Leong and BP each sold 100,000 barrels at 10 cents a barrel over benchmark quotes, the smallest premium in a week. The cargoes are for Nov. 4 to Nov. 8, the earliest loading period.

Jet fuel’s premium to gasoil, or diesel, fell 5 cents to $2.80 a barrel at 3:21 p.m. Singapore time, based on data from PVM Oil Associates Ltd., a London-based broker. This regrade is the narrowest so far this week, signaling it is less profitable to produce aviation fuel over diesel.

Gasoil’s premium to Asian marker Dubai crude rose 42 cents to $16.71 a barrel, PVM said. This crack spread is the widest since Oct. 7.

Fuel Oil

Hin Leong bought two 20,000-ton cargoes of 380-centistoke fuel oil in Singapore, bringing its purchases so far this month to at least 240,000 tons, according to the Bloomberg survey. The closely held trader paid $9 a ton over quotes for first-half November to Petroleo Brasileiro SA and Vitol, for loading from Nov. 15 to Nov. 19.

Fuel oil’s discount to Dubai crude narrowed 43 cents to $4.18 a barrel at 3:21 p.m. Singapore time, based on PVM data. That’s the smallest gap in a week, indicating reduced losses for refiners turning oil into residual products.

The premium of 180-centistoke fuel oil to 380-centistoke grade decreased 50 cents to $7 a ton, the lowest in a week, PVM said. A narrowing viscosity spread shows bunker, or marine fuel, has declined less than higher-quality fuel oil.

--Editors: 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: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net


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