Bloomberg News

Asia Naphtha Crack Narrows; Hin Leong Buys Cargoes: Oil Products

January 03, 2012

Jan. 3 (Bloomberg) -- Asia’s naphtha crack spread narrowed. Hin Leong Trading Pte bought gasoil and fuel-oil cargoes in Singapore, the region’s biggest oil-trading center

Reliance Industries Ltd., owner of the world’s largest refining complex, may shut units at the newer of its two processing facilities in western India for maintenance next month, according to two people with knowledge of the plan.

Light Distillates

Japan naphtha swaps were at a premium of $91.12 a metric ton to Brent crude futures at 2:19 p.m. Singapore time, according to data compiled by Bloomberg. This crack spread, a measure of the profit from making the petrochemical and gasoline feedstock, was at $90.07 at the end of Asian trading on Dec. 30.

Glencore International Plc agreed with Marubeni Corp. to swap a naphtha cargo for second-half February delivery with a second-half March shipment at $7 a ton, based on a Bloomberg News survey of traders who monitored transactions on the Platts window. This indicates the market is in backwardation, with later-delivered cargoes at a discount to prompt supplies.

Royal Dutch Shell Plc, the biggest buyer of 95-RON gasoline in Singapore last month, purchased 50,000 barrels from Vitol Group at $119.30 a barrel, the survey showed.

Middle Distillates

Hin Leong bought 250,000 barrels of gasoil, or diesel, with 0.5 percent sulfur from Shell, according to the Bloomberg survey. The closely held Singapore trader paid 70 cents a barrel over benchmark quotes to load between Jan. 22 and Jan. 26.

Gasoil’s premium to Asian marker Dubai crude rose 35 cents to $17.67 a barrel at 2:49 p.m. Singapore time, based on data from PVM Oil Associates Ltd., a broker. This crack spread is the widest in five days.

Jet fuel’s premium to gasoil gained 95 cents to 75 cents a barrel, PVM said. This regrade is the highest since Dec. 14, signaling it is profitable to produce aviation fuel over diesel.

Fuel Oil

Hin Leong bought three 20,000-ton cargoes of 380-centistoke fuel oil in Singapore, according to the Bloomberg survey. It paid $14 a ton over January quotes to Kuo Oil Ltd. for two cargoes and to Gunvor Group Ltd. for one shipment. The supplies are for loading from Jan. 23 to Jan. 27.

Fuel oil’s discount to Dubai crude widened $2.49 to $4.05 a barrel at 2:29 p.m. Singapore time, according to PVM. That’s the biggest gap since Dec. 16, indicating losses for refiners turning oil into residual products.

The premium of 180-centistoke fuel oil to 380-centistoke grade increased 50 cents to $11.25 a ton, PVM data showed. A wider viscosity spread means bunker, or marine fuel, advanced less than higher-quality fuel oil.

--Editors: Mike Anderson, Alexander Kwiatkowski.

To contact the reporters on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net; Ann Koh in Singapore at akoh15@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net


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