Bloomberg News

Vitol Buys Jet Fuel Cargo in Europe; Gasoil Rises: Oil Products

December 29, 2011

Dec. 29 (Bloomberg) -- Vitol Group bought a jet fuel cargo in northwest Europe, its second in a week, at a lower price than the previous deal.

Gasoil gained on London’s ICE Futures Europe exchange. The heating fuel’s crack, or premium to Brent crude, increased to the highest in two weeks.

Light Products

Gasoline for immediate loading in Amsterdam-Rotterdam- Antwerp traded at $918 to $924 a metric ton, according to a survey of brokers and traders monitoring the Argus Bulletin Board and Platts pricing window. That compares with yesterday’s deals at $926.50 and $929.

The motor fuel’s premium to Brent, the region’s benchmark, fell 3 cents to $3.54 a barrel, according to data from PVM Oil Associates Ltd., a crude and refined products broker in London.

Naphtha’s discount to Brent narrowed to $7.33 a barrel from $7.54 yesterday, PVM data show. That’s the least since Dec. 20.

Middle Distillates

Vitol purchased a jet fuel cargo from Morgan Stanley, partly priced at a premium of $59 a ton to January gasoil for delivery to Le Havre in France, according to the survey of Platts prices which ends at 4:30 p.m. London time. Vitol bought a cargo on Dec. 23 at a $66 premium.

Jet fuel barges traded at premiums of $61 and $63 a ton to January gasoil, according to the survey. Vitol was the main buyer. That compares with trades yesterday at $64.

Diesel barges traded at premiums of $19 and $19.50 a ton to January gasoil, the survey showed. BP Plc sold 6,000 tons to Morgan Stanley. That compares with yesterday’s deals at premiums of $18 and $19.

Gasoil for January gained 0.4 percent to $922.25 a ton at 4:48 p.m. London time on the ICE exchange. The contract for February advanced 0.3 percent to $917.50. Front-month Brent fell 0.6 percent to $106.89 a barrel.

Gasoil’s crack, a measure of refining profitability, rose to $16.22 a barrel from $15.45 at 4:30 p.m. yesterday, according to ICE data. That’s the highest since Dec. 16.

The crack gained for a third day as the possible closure of Petroplus Holdings AG’s refineries may reduce supply and increase the need for imports. Petroplus’ Chief Executive Officer Jean-Paul Vettier said yesterday the company may have to start shutting the plants if it can’t come to an agreement with lenders. Petroplus said on Dec. 27 that about $1 billion in uncommitted loans had been frozen.

“If the Petroplus system shuts down, the European distillates premiums have, in our opinion, more room for improvement,” Olivier Jakob, managing director at Petromatrix GmbH in Switzerland, said today in a note. “Europe will have to increase its imports of diesel from India and the U.S. Gulf.”

Heating oil barges traded at parity to the January futures contract, according to the survey of Platts. That compares with discounts of as much as $1 yesterday. Distillates include jet fuel, diesel and gasoil.

Residues

High sulfur fuel oil traded at $615 to $619.50 a ton, according to the survey of Platts. That compares with deals yesterday at $613 to $618. The low sulfur grade changed hands at $655 a ton.

--With assistance from Helena Athanasiou 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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