Bloomberg News

BP Buys U.K. Diesel Cargoes; Europe Gasoil Rises: Oil Products

February 05, 2012

Feb. 3 (Bloomberg) -- BP Plc bought two cargoes of ultra- low-sulfur diesel for delivery to the Thames River in England near Petroplus Holdings AG’s Coryton refinery, which is operating at 45 percent of its 220,000 barrel-a-day capacity.

Heating oil barge discounts shrank versus February gasoil on the ICE Futures Europe exchange in London. Neste Oil Oyj plans to halt a diesel unit at its Porvoo refinery in Finland in the second quarter for five weeks.

Light Products

Gasoline for immediate loading in Amsterdam-Rotterdam- Antwerp traded from $997.50 to $1,008 a metric ton, according to a survey of brokers and traders monitoring the Argus Bulletin Board. That compares with deals from $993 to $1,003 yesterday. The prices are for barge lots, usually of 1,000 or 2,000 tons.

Mabanaft BV, OAO Lukoil’s Litasco unit and Hess Corp.’s Hetco unit sold to Shell, North Sea Group, Trafigura Beheer BV, Vitol Group, Cargill Inc. and Noble Group.

The front-month gasoline crack, or premium to Brent, dropped to $6.88 a barrel from $7.07 yesterday, according to data from PVM Oil Associates Ltd., a London-based broker. The spread rose to an eight-month high of $10.11 on Jan. 27.

Gunvor Group Ltd. sold a 12,500 ton-cargo of naphtha to Vitol at $985 a ton, according to a survey of traders and brokers monitoring the Platts pricing window. That’s up from $980 yesterday.

Naphtha’s discount to Brent widened to $4.86 a barrel from $4.40 in the previous session, PVM data showed. That’s the biggest gap since Jan. 24.

Middle Distillates

BP bought two 20,000 ton-cargoes of diesel for delivery to Thames River at a premium of $23 a ton to February gasoil, the Platts survey showed. Vitol and Litasco sold. Barges of the fuel changed hands at $20 more than ICE gasoil, up from $16.50 and $17 yesterday. Vitol sold to BP.

Heating fuel traded from parity to a discount of $1.50 a ton to February gasoil, according to the survey. That’s up from yesterday’s deals at discounts from $1 to $2. Total, Gunvor, and North Sea Group bought from Morgan Stanley and Shell. The low- sulfur grade rose to trade at a premium of $17 a ton from $15 yesterday.

Air France-KLM sold two barges of jet fuel to BP at premiums of $62 and $63 a ton to February gasoil, the survey showed. That’s little changed from the last deal on Feb. 1.

Gasoil for February delivery increased 1.8 percent, or $17.25, to $965 a ton on ICE.

That contract’s discount to March futures shrank to 75 cents a ton from $1.75 yesterday. A narrowing in the spread between the contracts can signal increased demand.

“Stocks in Amsterdam-Rotterdam-Antwerp have been rebuilding over the last few weeks and will provide some cushion for any incremental demand coming from the current European cold spell,” Olivier Jakob, managing director of Petromatrix GmbH, a Switzerland-based researcher, said today in an e-mailed note.

Temperatures in Berlin will drop to minus 15 degrees Celsius (5 Fahrenheit) tomorrow, compared with a five-year average of minus 2, CustomWeather Inc. data show. Germany is Europe’s biggest market for the fuel.

The product’s crack, a measure of refining profit, was at $16.18 a barrel, versus $15.67 at 4:30 p.m. yesterday, according to ICE data. Brent crude gained 0.4 percent to $112.53 a barrel.

Residues

The Port of Rotterdam said 31 supertankers loaded fuel oil from its facilities last year, down from 35 vessels in 2010, the state-owned operator said in a statement on its website today.

The State Oil Co. of Azerbaijan, known as Socar, bought fuel oil for loading in February from Essar Oil Ltd., owner of India’s second-largest private refinery, said two traders who declined to be identified because they aren’t authorized to speak with the media.

High-sulfur fuel oil traded at $659.50 to $664 a ton, within yesterday’s range at $657.50 to $665 a ton, the survey showed. The low-sulfur grade changed hands at $687 a ton, compared with trades at $676 to $677 yesterday.

Refineries

The diesel unit at Neste’s 200,000 barrel-a-day Porvoo plant will be closed for “coke removal” next quarter, the company said today in a statement.

A crude tanker left the Coryton refinery with a smaller draft, signaling the ship had discharged oil at the plant, according to AISLive ship-tracking data on Bloomberg.

The Lian Xing Hu had a draft, or sailing depth, of 8.6 meters (28 feet) today compared with 12.8 meters on Feb. 1, the data show. The tanker was anchored off the coast of southeast England for more than a week before it arrived at the plant and departed yesterday.

--With assistance from Claire Borchers in and Nidaa Bakhsh in London. Editors: Raj Rajendran, Rachel Graham.

To contact the reporter on this story: Lananh Nguyen in London at lnguyen35@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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