Bloomberg News

Asia Naphtha Crack Gains; Hin Leong Buys Cargoes: Oil Products

December 07, 2011

Dec. 7 (Bloomberg) -- Asia’s naphtha crack spread extended gains, indicating higher profits for refiners making the petrochemical feedstock. Hin Leong Trading Pte bought gasoil and fuel oil in Singapore, the region’s biggest oil-trading center.

Light Distillates

Naphtha’s premium to London-traded Brent crude futures rose to $85 a metric ton at 5:50 p.m. Singapore time from $79.90 at the end of Asian trading yesterday, according to data compiled by Bloomberg. This crack spread is a measure of refining profit.

Trafigura Beheer BV sold two cargoes in Singapore, each containing 50,000 barrels of 92-RON gasoline, for $112.20 a barrel, based on a Bloomberg survey of traders who monitored transactions on the Platts window. Vitol Group bought one cargo, and Total SA purchased the other.

Cargill Inc. bought 25,000 tons of open-specification naphtha for delivery in the first half of February from Royal Dutch Shell Plc at $921 a ton, the survey showed. That’s the third cargo it has purchased this month.

Middle Distillates

Hin Leong bought 150,000 barrels of gasoil, or diesel, with 0.5 percent sulfur from BP Plc for a second day, paying 70 cents a barrel more than benchmark quotes, according to the Bloomberg survey. That’s the highest premium in two weeks. The cargo is for Dec. 22 to Dec. 26, the earliest loading period.

Gasoil’s premium to Asian marker Dubai crude rose 72 cents to $18.56 a barrel at 3:03 p.m. Singapore time, based on data from PVM Oil Associates Ltd., a broker. This crack spread widened the most since Nov. 11.

Jet fuel’s premium to gasoil climbed 5 cents to $1.35 a barrel, PVM data showed. This regrade narrowed the previous two days, indicating it was less profitable to produce aviation fuel over diesel.

Fuel Oil

Hin Leong bought 20,000 tons of 180-centistoke fuel oil from Vitol at $14 a ton over benchmark quotes, according to the Bloomberg survey. The cargo will load from Dec. 22 to Dec. 26.

Hin Leong also purchased two cargoes of 380-centistoke grade, paying $9 a ton over December quotes to Vitol and a $5 premium to Cargill, the survey showed. Koch Industries Inc. sold a similar cargo to Cargill for $17 above January prices.

Fuel oil’s discount to Dubai crude widened 27 cents to $5.47 a barrel at 3:03 p.m. Singapore time, based on PVM data. The difference increased for the fifth time in six days, signaling refiners’ losses from turning oil into residual products are growing.

The premium of 180-centistoke fuel oil to 380-centistoke grade added 50 cents to $14.25 a ton, PVM said. This viscosity spread is the widest since Nov. 25, meaning bunker, or marine fuel, advanced less than higher-quality fuel oil.

--Editor: Mike Anderson.

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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