Bloomberg News

European Diesel Premiums Fall; Gasoil Crack Gains: Oil Products

February 07, 2012

Feb. 7 (Bloomberg) -- Diesel and jet fuel premiums in northwest Europe fell. Gasoil’s crack, or premium to Brent crude, widened.

Gasoil futures traded in backwardation on the ICE Futures Europe exchange in London for a second day, a market structure that can signal increased demand. Fuel oil rose.

Light Products

Gasoline for immediate loading in Amsterdam-Rotterdam- Antwerp traded at $1,016 to $1,022 a metric ton, according to a survey of brokers and traders monitoring the Argus Bulletin Board and Platts pricing window. That compares with deals at $1,006 to $1,016 yesterday.

The trades are for Eurobob grade to which ethanol is added to make the finished motor fuel.

The fuel’s crack, or premium to Brent, fell to $5.73 a barrel from $5.82 yesterday, according to data from PVM Oil Associates Ltd., a crude and refined products broker in London.

Naphtha’s discount to Brent narrowed 10 cents to $4.72 a barrel, PVM data show.

Middle Distillates

Diesel barges traded four times at a premium of $16 a ton to February gasoil, according to a survey of brokers and traders monitoring the Platts pricing window which ends at 4:30 p.m. London time. BP Plc bought for a fifth day. That compares with deals yesterday at premiums of $20 and $22. A deal was also done today at $16.25 more than March gasoil, the survey showed.

Three diesel cargoes changed hands, two of which were priced for delivery to the French port of Le Havre, the survey showed.

BP sold a shipment of the fuel to OAO Lukoil’s Litasco unit at a premium of $18 a ton to February gasoil, priced for delivery to Le Havre, according to the survey. On Feb. 3, a cargo traded at $23 more than February gasoil for delivery to the U.K.

A second cargo was concluded at a discount of $3 to Platts benchmark French diesel prices. ConocoPhillips was the seller. A third shipment changed hands at a $26 premium to March gasoil, priced for delivery to Lavera in France, the survey showed.

Air France-KLM sold barges of jet fuel to Morgan Stanley and Royal Dutch Shell Plc at a $57 premium to March gasoil, the survey showed. That compares with a trade yesterday at $59.

Gasoil futures rose for a third day on ICE, advancing to as much as $1,003.25, the highest level since May 4.

The contract for February added 1.2 percent to $1000.25 a ton at 5:48 p.m. London time on the ICE exchange. That contract was at a premium of $1 to March futures, keeping the market in backwardation.

Gasoil’s crack, a measure of refining profitability, widened to $16.92 a barrel from $16.84 at 4:30 p.m. yesterday, according to ICE data. Front-month Brent gained 0.7 percent to $116.77 a barrel on the ICE exchange.

Barges of the heating oil traded at discounts of 50 cents to $1 a ton to the February futures contract, the Platts survey showed. That compares with trades at parity yesterday.

Sonatrach, Algeria’s state oil company, plans to import about 2 million metric tons of diesel in 2012 compared with 1.3 million tons last year to offset refinery halts, Yamina Hamdi, vice president of commercial activity at the company, said in an interview in the country’s capital Algiers.

Residues

High-sulfur fuel oil traded from $683.75 to $690 a ton, the survey of Platts showed. That compares with deals yesterday from $682.25 to $688. The low-sulfur grade changed hands at $711 a ton compared with deals from $704 to $707 in the previous session.

Refineries

BP will halt its 110,000 barrel-a-day Castellon oil refinery in Spain from mid-May for five weeks of maintenance, a company official said, declining to be identified citing company policy.

--With assistance from Helena Athanasiou, Lananh Nguyen and Rupert Rowling in London. Editors: Rachel Graham, Raj Rajendran

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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