Bloomberg News

Lukoil Buys Gasoline in Europe; Gasoil Crack Falls: Oil Products

January 12, 2012

Jan. 12 (Bloomberg) -- Litasco, OAO Lukoil’s trading unit, was the biggest buyer of gasoline barges in northwest Europe today. The fuel’s crack, or premium to Brent crude, widened.

Gasoil was little changed on London’s ICE Futures Europe exchange even as Brent, Europe’s benchmark, climbed. The heating fuel’s crack fell, while its contango widened.

Light Products

Gasoline for immediate loading in Amsterdam-Rotterdam- Antwerp traded at $963 to $968 a metric ton, according to a survey of brokers and traders monitoring the Argus Bulletin Board. That compares with deals yesterday at $958 to $971.

Lukoil bought 9,000 tons of the almost 16,000 tons that changed hands, while Total SA was the main seller. The trades are for Eurobob grade to which ethanol is added to make the finished motor fuel blend.

The fuel’s premium to Brent climbed to $3.15 a barrel from $2.82 yesterday, according to data from PVM Oil Associates Ltd., a crude and refined products broker in London.

Naphtha’s discount to Brent widened to $8.27 a barrel from $7.89 yesterday, PVM data show.

Middle Distillates

Gasoil for February was little changed at $972 a ton at 12:36 p.m. London time on the ICE exchange. The January contract, which expired today, last traded at $971.50.

That means the contango widened to 50 cents from 25 cents yesterday at the close of the front month contract. Contango is a price structure to describe a situation where later-dated deliveries are more expensive than nearer supplies. The reverse is known as backwardation.

Gasoil’s crack, a measure of refining profitability, fell to $16.80 a barrel from $17.28 at 4:30 p.m. yesterday, according to ICE data. Front-month Brent surged 1.4 percent to $113.75 a barrel on the ICE exchange.

--With assistance from Lananh Nguyen in London. Editors: Raj Rajendran, 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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