Bloomberg News

BP Buys Jet Fuel Cargo; Gasoline at Nine-Month Low: Oil Products

December 15, 2011

Dec. 15 (Bloomberg) -- BP Plc bought its second jet fuel cargo from Royal Dutch Shell Plc this week for more than an earlier deal. Morgan Stanley sought to buy the aviation fuel on the barge market, without finding a seller.

Gasoline for immediate loading fell to a nine-month low as Trafigura Beheer BV sold barges. Gasoil dropped on the ICE Futures Europe exchange in London.

Light Products

Gasoline barges for immediate loading in northwest Europe traded from $885 to $895 a metric ton, according to a Bloomberg survey of brokers and traders monitoring the Argus Bulletin Board and Platts pricing window. That’s the lowest since Feb. 18, data compiled by Bloomberg showed. The deals are for Eurobob grade to which ethanol is added to make the finished product.

The fuel’s premium to Brent was little changed at $1.60 a barrel, according to data from PVM Oil Associates Ltd., a London-based broker.

Middle Distillates

BP secured 30,000 tons of jet fuel from Shell, agreeing to pay $66 more than the January ICE gasoil, the survey showed. That’s more than a $62 premium on a deal two days ago. Both cargoes are for delivery to the French port of Le Havre.

Jet fuel barges didn’t trade in the Platts window as no one offered to sell. Shell and Total were among bidders, offering to pay $56 and $57 more than January gasoil. It traded at a $55 premium yesterday.

Gasoil for January dropped $6.75, or 0.8 percent, to $898 a ton on ICE as of 4:56 p.m. London time. It was at a $3.50 premium to the February contract, keeping the market in backwardation.

A market is in backwardation when near-term deliveries are more expensive than future supplies and may signal dwindling supply or rising demand.

Gasoil barges dropped relative to front-month gasoil, the survey showed. Deals were done today from 50 cents to $2 more than gasoil, down from $3 yesterday. Diesel barges traded at premiums of $13 and $14 to January futures, little changed from yesterday, the survey showed.

RESIDUES

Low-sulfur fuel oil barges traded from $636 to $644 a ton, the survey showed. High-sulfur barges traded from $589 to $593 a ton. Low-sulfur contains no more than 1 percent of sulfur while high-sulfur has a 3.5 percent threshold.

--With assistance from Helena Athanasiou and Nidaa Bakhsh in London. Editors: Raj Rajendran, Alessandro Vitelli

To contact the reporter on this story: Rachel Graham in London rgraham13@bloomberg.net

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


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus