Bloomberg News

Asia Naphtha Crack Widens; Shell Sells Gasoil: Oil Products

February 09, 2012

Feb. 9 (Bloomberg) -- Asia’s naphtha crack spread widened, signaling rising profit for refiners making the petrochemical feedstock. Royal Dutch Shell Plc sold gasoil for a second day in Singapore.

Light Distillates

Japan naphtha’s premium to London-traded Brent crude futures rose to $114.10 a metric ton at 3 p.m. Singapore time from $109.01 yesterday, according to data compiled by Bloomberg.

Shell sold 25,000 tons of open-specification naphtha for first-half April delivery to Cargill Inc. at $1,021 a ton, according to a Bloomberg News survey of traders who monitored transactions on the Platts window.

Gunvor Group Ltd. sold 50,000 barrels of 92-RON gasoline to BP Plc at $128 a barrel and purchased 50,000 barrels of 95-RON from Total SA at $130 a barrel, the survey showed.

Middle Distillates

Shell sold 150,000 barrels of gasoil, or diesel, with 0.5 percent sulfur to Brightoil Petroleum Holdings Ltd., according to the Bloomberg survey. It received 25 cents a barrel more than February quotes. Hin Leong Trading Pte bought a similar cargo from BP Plc at the same price. Both shipments are for loading from Feb. 24 to Feb. 28.

Gasoil’s premium to Asian marker Dubai crude fell 62 cents to $18.13 a barrel at 2:32 p.m. Singapore time, based on data from PVM Oil Associates Ltd., a broker. This crack spread, a measure of refining profit, is the narrowest so far this week.

Jet fuel was unchanged at 65 cents a barrel below gasoil, PVM data showed. This regrade has been negative since Jan. 16, indicating it is unprofitable to produce aviation fuel over diesel.

Fuel Oil

Fuel oil dropped 10 cents to $3.42 a barrel below Dubai crude at 2:32 p.m. Singapore time, according to PVM. A bigger discount signals widening losses for refiners turning oil into residual products.

The premium of 180-centistoke fuel oil to 380-centistoke grade, or the viscosity spread, was unchanged after climbing to $9.75 a ton, PVM said. This means bunker, or marine fuel, moved in tandem with higher-quality fuel oil.

Tenders

Vitol Group was said to pay the highest premiums in nine months to Indian refiners for naphtha cargoes, amid increased demand for the fuel and reduced supplies to Asia from Europe, according to people familiar with the transactions. The Geneva- based trader paid $37 a ton above Middle East prices to Bharat Petroleum Corp. for a March-loading cargo.

Bharat Petroleum, India’s second-largest state-run refiner, issued a tender to sell six naphtha cargoes totaling 210,000 tons for loading from April to June, according to a tender document.

Vietnam National Petroleum Corp. is seeking to buy 30,000 tons of gasoline for March loading, the company said in a document e-mailed to potential suppliers.

Saigon Petroleum Co. is seeking to buy 20,000 tons of gasoline and gasoil for February and March loading, the Ho Chi Minh City-based company said in a document.

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

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: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net


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