Bloomberg News

Asia Naphtha Crack Widens; BP Sells Fuel Oil: Oil Products

October 21, 2011

Oct. 21 (Bloomberg) -- Asia refining margins for naphtha rose this week. BP Plc sold fuel oil in Singapore at the biggest premium to spot prices since February.

Light Distillates

BP sold 50,000 barrels of 92-RON gasoline to Trafigura Beheer BV at $120 a barrel, according to a Bloomberg survey of traders monitoring transactions on the Platts window. That price was $1.50 a barrel higher than that paid for similar cargoes yesterday. Royal Dutch Shell Plc bought 25,000 metric tons of naphtha for second-half December delivery from Itochu Corp. at $884 a ton.

Naphtha’s premium to London-traded Brent crude futures was at $57.10 a ton at 5:36 p.m. Singapore time, up from $54 a ton on Oct. 14, according to data compiled by Bloomberg. This crack spread, a measure of refining profit, was at $57.57 yesterday.

Middle Distillates

Shell sold 150,000 barrels of gasoil, or diesel, with 0.5 percent sulfur to Hin Leong Trading Pte at 50 cents a barrel over benchmark quotes, according to the Bloomberg survey. That’s the largest premium since Oct. 12. Shell, Europe’s biggest oil company, also sold a jet-fuel cargo to BP at 20 cents over November quotes.

Gasoil’s premium to Asian marker Dubai crude rose 36 cents to $17.78 a barrel at 2:09 p.m. Singapore time, based on data from PVM Oil Associates Ltd., a broker. This crack spread, a measure of refining profit, has widened 9 percent so far this week, after narrowing the previous two.

Jet fuel’s premium to gasoil was unchanged after falling to $2.65 a barrel, PVM said. This regrade is up 16 percent from last week, indicating it is profitable to produce aviation fuel over diesel.

Fuel Oil

BP sold 25,000 tons of 380-centistoke fuel oil to PetroChina Co. in Singapore at $12 a ton over benchmark quotes, according to the Bloomberg survey. That’s the biggest premium since Feb. 16. The cargo is for loading from Nov. 13 to Nov. 17.

Fuel oil’s discount to Dubai crude narrowed $1.28 to $4.20 a barrel at 2:09 p.m. Singapore time, according to PVM. The difference has narrowed 23 percent so far this week, after widening the previous two weeks, signaling reduced losses for refiners turning oil into residual products are growing.

The premium of 180-centistoke fuel oil to 380-centistoke grade fell 50 cents to $5.50 a ton, PVM data showed. This viscosity spread has widened 11 percent from last week, meaning bunker, or marine fuel, gained less than higher-quality fuel oil.

--Editors: Mike Anderson, Christian Schmollinger.

To contact the reporter on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net; Ann Koh in Singapore at akoh15@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net


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