Bloomberg News

Asia Naphtha Crack Falls; Shell Buys Fuel Cargoes: Oil Products

February 01, 2012

Feb. 1 (Bloomberg) -- Asia’s naphtha crack spread fell, signaling reduced profit for refiners making the petrochemical feedstock. Trafigura Beheer BV bought gasoline and Royal Dutch Shell Plc purchased fuel-oil cargoes in Singapore.

Light Distillates

Naphtha’s premium to London-traded Brent-crude futures dropped to $129.52 a metric ton at 3 p.m. Singapore time from $136.88 yesterday, according to data compiled by Bloomberg. This crack spread, a measure of refining profit, widened 42 percent in January to gain for a second month.

Glencore International Plc sold 25,000 tons of open- specification naphtha for first-half April delivery to Cargill Inc. at $979 a ton, based on a Bloomberg News survey of traders who monitored transactions on the Platts window.

Glencore and Vitol Group agreed to swap naphtha for first- half March delivery with a second-half April cargo at $7 a ton, the survey showed. Glencore also agreed with Koch Industries Inc. to exchange a second-half March cargo for first-half April at $6 a ton.

Trafigura bought four 50,000-barrel cargoes of 92-RON gasoline, based on the survey. Gracewood International Ltd. sold two cargoes at $123.10 a barrel and $123.50. Gunvor Group Ltd. and Total SA each sold one cargo at $123.20 a barrel. Gunvor purchased 50,000 barrels of 95-RON grade from Total at 125.40 a barrel.

Fuel Oil

Shell bought 20,000 tons of 180-centistoke fuel oil from Petroleo Brasileiro SA, or Petrobras, paying $13.75 a ton over benchmark quotes, according to the Bloomberg survey. Shell, Europe’s largest oil company, also purchased a similar-sized cargo of 380-centistoke grade from PetroChina Co. at the same premium. Both cargoes are for Feb. 16 to Feb. 20, the earliest loading period.

Fuel oil fell $1.65 to $2.04 a barrel below Asian marker Dubai crude at 2:43 p.m. Singapore time, based on data from PVM Oil Associates Ltd., a broker. Yesterday, this crack spread turned negative for the first time in five days, signaling losses for refiners processing oil into residual products.

The premium of 180-centistoke fuel oil to 380-centistoke grade increased 25 cents to $10.50 a ton, PVM said. This viscosity spread narrowed 23 percent in the past three days, meaning bunker, or marine fuel, declined less than higher- quality fuel oil.

Middle Distillates

The premium of gasoil, or diesel, to Dubai crude rose 12 cents to $18.75 a barrel at 2:43 p.m. Singapore time, according to PVM. This crack spread widened for the fifth day in six.

Jet fuel climbed 85 cents to 20 cents a barrel below gasoil, PVM data showed. This regrade has been at a discount since Jan. 16, indicating it is unprofitable to produce aviation fuel over diesel.

Refinery News

Japan’s TonenGeneral Sekiyu K.K. plans to shut two crude- distillation units at its Kawasaki refinery in May for maintenance, two people familiar with the matter said. The company isn’t planning to close a 540,000 ton-a-year naphtha cracker at the refinery for repairs this year.

Tenders

Itochu Corp. and Cargill Inc. bought as much as 50,000 tons of naphtha from Hindustan Petroleum Corp., India’s third-largest state refiner, according to two traders. The companies paid about $25 a ton above Middle East benchmark prices for the fuel.

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

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: Mike Anderson at manderson34@bloomberg.net


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