Bloomberg News

Asia Naphtha Crack Shrinks; Petrobras Sells Fuel: Oil Products

November 23, 2011

Nov. 23 (Bloomberg) -- Asia’s naphtha crack spread narrowed, signaling reduced profit for refiners. Petroleo Brasileiro SA, or Petrobras, sold fuel oil in Singapore, the region’s biggest oil-trading center.

Light Distillates

Naphtha’s premium to London-traded Brent crude futures was at $55.80 a metric ton at 5:45 p.m. Singapore time, from $58.20 at the end of Asian trading yesterday, according to data compiled by Bloomberg. This crack spread is a measure of the profit from making naphtha, used as a feedstock for petrochemicals and gasoline.

Glencore International Plc sold 25,000 tons of open- specification naphtha for first-half February delivery at $869 a ton to BP Plc, based on a Bloomberg survey of traders who monitored transactions on the Platts window.

Middle Distillates

Trafigura Beheer BV bought 250,000 barrels of gasoil, or diesel, with 0.5 percent sulfur from Royal Dutch Shell Plc, paying 70 cents a barrel over benchmark quotes to load from Dec. 18 to Dec. 22, according to the Bloomberg survey. The Amsterdam- based trader has purchased at least 24 cargoes totaling 3.9 million barrels so far this month.

Gasoil’s premium to Asian marker Dubai crude slid 1 cent to $19.48 a barrel at 2 p.m. Singapore time, based on data from PVM Oil Associates Ltd., a broker. This crack spread narrowed for a fifth day, the longest losing streak since September.

Jet fuel’s premium to gasoil fell 10 cents to $1.60 a barrel, the first drop in six days, PVM data showed. A declining regrade indicates it is less profitable to produce aviation fuel over diesel.

Fuel Oil

Petroleo Brasileiro SA, or Petrobras, sold 20,000 tons of 180-centistoke fuel oil in Singapore to Shell for a second day, according to the Bloomberg survey. The state-owned company received $12.50 a ton over benchmark quotes to load between Dec. 16 and Dec. 20.

Vitol Group sold 40,000 tons of 380-centistoke fuel oil to Brightoil Petroleum Holdings Ltd. at $13 a ton over quotes, for Dec. 12 to Dec. 16 loading, the survey showed. That’s the highest premium for this grade since Nov. 10.

Fuel oil’s discount to Dubai crude narrowed 17 cents to $5.30 a barrel at 2 p.m. Singapore time, based on PVM data. The difference widened $2.34 in the previous four days, signaling losses for refiners turning oil into residual products.

The premium of 180-centistoke fuel oil to 380-centistoke grade, or the viscosity spread, increased 50 cents to $12.50 a ton, PVM said. This means bunker, or marine fuel, advanced less than higher-quality fuel oil.

--Editors: Paul Gordon, Ryan Woo

To contact the reporters 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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