Diesel Barges Fall; Petroplus to Cut German Output: Oil Products
February 08, 2012, 10:59 PM ESTBy Nidaa Bakhsh
Feb. 8 (Bloomberg) -- European diesel premiums dropped to the lowest level in more than a week. Jet fuel rose as Royal Dutch Shell Plc bought on the barge market for a second day.
The administrator for Petroplus Holdings AG’s Ingolstadt refinery in Germany said production will be cut from tomorrow as crude supplies dwindle. Enel SpA started three fuel oil-fired power stations in Italy.
Light Products
Gasoline for immediate loading in Amsterdam-Rotterdam- Antwerp traded from $1,017 to $1,022.50 a metric ton, according to a survey of brokers and traders monitoring the Argus Bulletin Board. That’s in line with deals 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, decreased to $5.49 a barrel from $5.55 yesterday, according to data from PVM Oil Associates Ltd., a crude and refined products broker in London. That’s the lowest spread since Jan. 17.
Naphtha’s discount to Brent shrank to $5.26 a barrel from $5.49 yesterday, PVM data show.
Middle Distillates
Diesel barges, which trade at a differential to the gasoil contract on the ICE Futures Europe exchange in London, dropped relative to that measure.
Diesel traded at premiums from $14 to $14.50 a ton to the February contract, 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 sixth day. Morgan Stanley was the other buyer. That compares with trades yesterday at $16.
Two jet fuel deals took place in the barge market at premiums of $58 a ton to March gasoil, according to the survey. That compares with trades at a $57 premium to the same contract yesterday.
Vitol Group sold a gasoil cargo to OAO Lukoil’s Litasco unit for delivery to the French port of Le Havre, according to the survey. The shipment was priced at a premium of about $3 to Platts northwest European benchmark prices, the survey showed. That compares with a trade on Feb. 6 at $13 more than February gasoil futures.
Barges of heating oil traded at discounts of $2 a ton to February gasoil, it showed. That’s lower than trades yesterday.
Gasoil for February declined 0.4 percent to $991 a ton at 5:17 p.m. London time on ICE. That contract was at a 25 cent premium to March futures, keeping the market in backwardation for a third day. The reverse market structure is known as contango.
“The move of ICE gasoil out of a contango continues as it seems that we will be burning heavily heating oil also next week,” Olivier Jakob, managing director at Swiss-based Petromatrix GmbH, said today in a note.
Gasoil’s crack, a measure of refining profitability, fell to $16.70 a barrel from $16.86 at 4:30 p.m. yesterday. Front- month Brent gained 0.1 percent to $116.36 a barrel on the ICE exchange.
Residues
Enel started three fuel oil-fired power stations in Italy to make up for natural-gas shortage caused by colder-than-usual weather in the country and reduced imports from Russia, a company official said.
The three activated stations, which run on 0.3 percent low- sulfur fuel oil, are in Livorno, Piombino and Montalto di Castro, Luigi Michi, head of energy management at Enel Group, said today in an e-mailed response.
High-sulfur fuel oil traded from $680 to $685 a ton, the survey of Platts showed. That compares with deals yesterday from $683.75 to $690. The low-sulfur grade changed hands at $712 to $713 a ton compared with $711 yesterday.
Refineries
Operations at the 110,000 barrel-a-day Ingolstadt plant will be halted within about two weeks as the site hasn’t received any crude supplies since Petroplus filed for insolvency last month, Sebastian Brunner, a spokesman at Jaffe Rechtsanwaelte Insolvenzverwalter, said today by mobile phone.
--With assistance from Helena Athanasiou, Lananh Nguyen, Rachel Graham 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
