Bloomberg News

BP Buys Jet Fuel Cargo in Europe; Gasoline Rises: Oil Products

December 13, 2011

Dec. 13 (Bloomberg) -- BP Plc bought a jet fuel cargo at a lower price than a deal on Nov. 23. Diesel premiums rose. Gasoil on London’s ICE Futures Europe exchange increased. The heating fuel’s premium to Brent crude, or crack, declined. Gasoline barge prices surged after Brent climbed.

Light Products

Gasoline barges for immediate loading in Amsterdam- Rotterdam-Antwerp traded from $907 to as much as $931 a metric ton, according to a broker monitoring the Argus Bulletin Board. That compares with yesterday’s deals at $905 to $914.

Gasoline’s premium to Brent narrowed 8 cents to $1.28 a barrel, according to PVM Oil Associates Ltd., a crude and products broker in London.

Naphtha’s discount to Brent widened to $8.52 a barrel from $8.17 yesterday, PVM data show.

Naphtha-based petrochemical plants in Europe may be idled because of rising costs, leaving the region unable to compete with cheaper ethane-based facilities in North America and the Middle East, the International Energy Agency said in a report.

Middle Distillates

BP purchased the jet fuel from Royal Dutch Shell Plc’s trading arm at a premium of $62 a ton to January ICE gasoil, priced for delivery to the French port of Le Havre, according to a survey of traders and brokers monitoring the Platts pricing window which ends at 4:30 p.m. London time. BP secured a cargo on Nov. 23 at a $71 premium.

Diesel barges changed hands at premiums of $13 to $16 a ton to January gasoil, the survey of Platts showed. That compares with premiums of $12 to $14 yesterday.

Barges of gasoil traded at premiums of $2 a ton to January gasoil, according to the survey. That’s lower than yesterday’s deals at $4 and $5 more than the futures price.

Gasoil for January rose 0.6 percent to $928.50 a ton as of 4:46 p.m. London time, according to data by the ICE exchange. Front-month Brent increased 1.8 percent to $109.17 a barrel.

The fuel’s crack, a measure of refining profitability, shrank to $15.88 a barrel from $16.13 at 4:30 p.m. yesterday according to ICE data.

Refining profits have ended the year at “dismal” levels and are set to continue in the new year because of slowing economic growth that’s cutting demand for oil-products such as diesel, according to JBC Energy GmbH.

--With assistance from Sherry Su and Mathew Toll in London. Editors: Alessandro Vitelli, Rachel Graham.

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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