Bloomberg News

Europe Jet Fuel Falls; Repsol Halts Bilbao Units: Oil Products

December 29, 2011

Dec. 28 (Bloomberg) -- European jet fuel dropped as BP Plc sold on the barge market. Gasoil fell on London’s ICE Futures Europe exchange as Brent crude, the region’s benchmark, fell.

Gasoline’s premium to Brent, or crack, rose to a two-month high amid concern that Petroplus Holding AG’s fuels output may be reduced after lenders froze credit lines. Workers at Repsol YPF SA’s Petronor refinery in Bilbao, Spain will strike from today for about five days.

Light Products

Gasoline for immediate loading in Amsterdam-Rotterdam- Antwerp traded at $926.50 and $929 a metric ton, a Bloomberg survey of brokers monitoring the Argus Bulletin Board showed. That’s the most since Nov. 11, according to data compiled by Bloomberg.

BP and Trafigura Beheer BV were the sellers. Royal Dutch Shell Plc, Cargill Inc. and OAO Lukoil’s trading arm were the buyers. The trades are for Eurobob grade to which ethanol is added to make finished motor fuel.

The motor fuel’s premium to Brent advanced to $3.36 a barrel, the most since Oct. 28, according to data from PVM Oil Associates Ltd., a crude and refined products broker in London.

“The loss of total refining capacity if the Petroplus system shuts down will be too great in our opinion and will support the product cracks,” Olivier Jakob, managing director at Petromatrix GmbH in Switzerland, said today in a note.

Petroplus said yesterday in a statement that about $1 billion in uncommitted loans had been frozen by lenders. The company may have to start shutting refineries if it can’t secure crude for its plants, Chief Executive Officer Jean-Paul Vettier said today by mobile phone.

“If nothing positive happens in coming days, the refineries will be running out of crude,” he said. “Given the inventories, we will have to begin shutting the refineries from the first days of January.”

Workers at the Petroplus’ Petit Couronne refinery in France voted to begin a strike today that will block deliveries of oil products, while allowing refinery operations to continue, said Laurent Patinier, a CFDT union representative. Petroplus’ five refineries have a combined crude-processing capacity of about 667,000 barrels a day.

Middle Distillates

Shell and Vitol Group bought the jet fuel consignments from BP at a premium of $64 a ton to the front-month ICE gasoil contract, according to a survey of brokers and traders monitoring the Platts pricing window which ends at 4:30 p.m. London time. That compares with Dec. 23 deals at $65 and $66.

Diesel barges traded at premiums of $18 and $19 a ton to January gasoil, the survey showed. BP was the main seller. Total SA and Shell were among the buyers. That’s in line with trades on Dec. 23.

Gasoil for January fell 0.8 percent to $917.50 a ton at 4:45 p.m. London time, according to ICE exchange data. The contract for February decreased 0.8 percent to $913.75 a ton.

The heating fuel’s crack, a measure of refining profits, rose to $15.45 a barrel from $14.84 at 4:30 p.m. on Dec. 23, according to ICE data. Front-month Brent dropped 1.8 percent to $107.26 a barrel.

Gasoil barges traded at parity and discounts of as much as $1 a ton to January futures, the survey of Platts showed. That compares with Dec. 22 deals at parity and a $1 premium.

Residues

High sulfur fuel oil traded at $613 to $618 a ton, according to the survey of Platts. That compares with deals on Dec. 23 at $611 to $612.75.

Refineries

Workers at Repsol’s plant in Bilbao will begin a strike at 6 p.m. local time today until 6 a.m. on Jan. 2, according to a statement on the plant’s website.

The strike will affect all units and the halting of the plants started last weekend, according to the statement. The refinery can process 220,000 barrels of crude a day.

--With assistance from Helena Athanasiou and Alex Morales in London. Editors: Rachel Graham, Rob Verdonck

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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