Bloomberg News

Eni Buys Diesel Cargo in Europe; Vitol Sells Jet: Oil Products

December 12, 2011

Dec. 12 (Bloomberg) -- Eni SpA, Italy’s largest oil company, bought a cargo of ultra-low-sulfur diesel in northwest Europe at a lower price than it was prepared to pay on Dec. 9. Vitol Group sold two lots of jet fuel barges. Gasoil fell.

Naphtha’s discount to Brent crude, or crack, narrowed to the least in almost two months. Gasoline’s crack increased for a third day to the most since early November.

Light Products

The naphtha crack narrowed to $8.17 a barrel, the lowest since Oct. 18, according to PVM Oil Associates Ltd., a crude and products broker in London. That compares with $8.96 on Dec. 9.

“European naphtha is improving, helped by an export push to the Far East,” Olivier Jakob, managing director of Petromatrix GmbH, said today in a note. Also, “Libya is putting more naphtha cargoes available for exports.”

Repsol YPF SA’s cracker at its Sines plant in Portugal is “temporarily” shut due to low demand, the Madrid-based company said in an e-mailed statement. The unit can produce 410,000 metric tons of ethylene a year, according to the website of the Association of Petrochemicals Producers in Europe.

Gasoline barges for immediate loading in Amsterdam- Rotterdam-Antwerp traded from $905 and $914 a ton, according to a broker monitoring the Argus Bulletin Board. That’s higher than Dec. 9 deals at $902 to $905. BP Plc was the seller and Trafigura Beheer BV was the main buyer. The trades are for Eurobob grade to which ethanol is added to make finished motor fuel and are typically for lots of 1,000 tons or 2,000 tons.

Gasoline’s premium to Brent widened to $1.62 a barrel from $1 on Dec. 9, PVM data shows. That’s the most since Nov. 4.

Middle Distillates

Eni purchased as much as 30,000 tons of diesel from BP at a premium of $33 a ton to January gasoil, priced for delivery to the French port of Lavera from Dec. 24 to Dec. 28, according to a survey of brokers and traders monitoring the Platts pricing window which ends at 4:30 p.m. London time. On Dec. 9, Eni bid for a cargo at a $40 premium.

Diesel barges changed hands at premiums of $12 to $14 a ton to January gasoil, according to the survey. That compares with a Dec. 9 trade at $15 more than the futures price.

Vitol sold the jet fuel barges to BP at a discount of $6 to northwest European benchmark prices, the survey showed. On Dec. 8, Morgan Stanley purchased one lot from Royal Dutch Shell Plc at $55 a ton more than January gasoil.

Barges of low-sulfur gasoil changed hands at premiums of $4 and $5 a ton to the futures contract, the survey showed. That compares with Dec. 9 deals at a $12 premium.

Gasoil for January lost 0.1 percent to $923.75 a ton as of 4:42 p.m. London time on the London-based ICE Futures Europe exchange. The December contract dropped 0.7 percent to $925.75 a ton at settlement today.

The amount of gasoil to be delivered through the exchange in December dropped to 196,300 tons, according to ICE data. That compares with 210,500 tons in November and 88,100 tons in December last year.

Net-long managed-money bets on ICE gasoil futures and options advanced to 62,730 contracts last week, up 8.7 percent from a week earlier, ICE data showed.

Residues

High-sulfur fuel oil traded at $604 to $609 a ton, the survey of Platts showed. That compares with deals on Dec. 9 at $606.50 to $610. The low-sulfur grade traded at $648 to $650 a ton, the survey showed.

--With assistance from Sherry Su and Juan Chen in London. Editors: Alessandro Vitelli, Raj Rajendran.

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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