Bloomberg News

PetroChina Sells Fuel Oil; Gasoil Crack Shrinks: Oil Products

January 12, 2012

Jan. 12 (Bloomberg) -- PetroChina Co. sold fuel-oil cargoes in Singapore, Asia’s biggest oil-trading center. Gasoil’s crack spread shrank the most in more than two weeks, signaling reduced profit for refiners making the distillate fuel.

Fuel Oil

PetroChina sold three 20,000-metric ton cargoes of 180- centistoke fuel oil to BP Plc in Singapore, according to a Bloomberg survey of traders who monitored transactions on the Platts window. China’s second-largest oil trader paid $732 a ton to load one cargo between Feb. 1 and Feb. 5 and $728 a ton for two shipments for Feb. 7 to Feb. 11.

Fuel oil’s discount to Asian marker Dubai crude widened 36 cents to $1.76 at 3:20 p.m. Singapore time, according to data from PVM Oil Associates Ltd., a broker. A wider gap indicates losses for refiners turning oil into residual products.

The premium of 180-centistoke fuel oil to 380-centistoke grade slid 25 cents to $13.25 a ton, PVM said. A narrower viscosity spread means bunker, or marine fuel, climbed more than higher-quality fuel oil.

Middle Distillates

Royal Dutch Shell Plc sold 150,000 barrels of gasoil, or diesel, with 0.5 percent sulfur to China International United Petroleum & Chemical Co., or Unipec, in Singapore, according to the Bloomberg survey. Europe’s biggest oil company paid 50 cents a barrel over benchmark quotes, a reduced premium from a transaction yesterday. The cargo is for Jan. 27 to Jan. 31.

Shell bought a similar-sized shipment with 10 parts-per- million of sulfur at a premium of $2.70 a barrel, the survey showed. This grade is known as ultra-low-sulfur diesel.

Gasoil’s premium to Dubai crude dropped 64 cents to $18.63 a barrel at 3:20 p.m. Singapore time, PVM data show. This crack spread, a measure of processing profit, narrowed the most since Dec. 27.

Jet fuel’s premium to gasoil declined 10 cents to 30 cents a barrel, PVM said. This regrade rose 55 cents over the previous three days, signaling it was more profitable to produce aviation fuel over diesel in that period.

Light Distillates

BP sold two 50,000-barrel cargoes of 92-RON gasoline in Singapore for Jan. 27 to Jan. 31 loading, according to the Bloomberg survey. Vitol Group bought one cargo at $120.24 a barrel and Gracewood International Ltd. paid $120.05 for the other shipment.

Shell purchased a 25,000-ton, open-specification naphtha contract for first-half March delivery from Mabanaft GmbH at $953 a ton, the survey showed.

Refinery News

Cosmo Oil Co. resumed partial operations at its 220,000 barrel-a-day Chiba refinery, which was shut by a fire caused by the March 11 earthquake in Japan. The refiner started the No. 10 fuel-oil hydro-desulfurization unit, a vacuum gasoil hydro- desulfurization plant and two facilities that produce hydrogen, according to a statement on its website today.

Tenders

Unipec bought 11,000 tons of naphtha from Bharat Petroleum Corp. at a discount of $31 a ton to Middle East prices, said two traders. Bharat’s naphtha loaded at Haldia port is of a lower quality than its shipments from other ports and is typically used to make gasoline rather than for producing petrochemicals. Glencore International Plc won a tender last year for a similar cargo and paid a discount of about $34 for December loading.

--With assistance from Pratish Narayanan in Mumbai. Editor: Alexander Kwiatkowski, Mike Anderson.

To contact the reporter on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net

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


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