Bloomberg News

BP, Total Buy Europe Diesel; Milazzo Plant to Halt: Oil Products

February 09, 2012

Feb. 9 (Bloomberg) -- European diesel premiums rose as BP Plc bought on the barge market for a seventh day. Gasoil’s crack, or premium to Brent crude, dropped.

Gasoline advanced to a five-month high. Raffineria di Milazzo SpA, an Italian refining joint venture of Eni SpA and Kuwait Petroleum Corp., will partly suspend operations in May for planned maintenance.

Light Products

Gasoline for immediate loading in Amsterdam-Rotterdam- Antwerp traded from $1,036 to $1,041 a metric ton, according to a survey of brokers and traders monitoring the Argus Bulletin Board. That’s the highest since Sept. 9 and compares with deals yesterday from $1,017 to $1,022.50. The trades are for Eurobob grade, to which ethanol is added to make finished motor fuel.

The fuel’s crack, or premium to Brent, rose to $6.23 a barrel from $5.84 yesterday, according to data from PVM Oil Associates Ltd., a crude and refined products broker in London.

Naphtha’s discount to Brent narrowed to $5.28 a barrel from $5.52 yesterday, PVM data show.

Kuwait Petroleum International Ltd., a unit of Kuwait Petroleum Corp., sold two cargoes of naphtha from its Milazzo plant in Sicily for loading Feb. 6 to Feb. 8 and Feb. 20 to Feb. 22, according to a company official. The tender was awarded at a premium of about $15 a ton to benchmark Mediterranean prices, the official said. One cargo is destined for Asia and the other will be used for petrochemical processing in the Mediterranean.

Middle Distillates

Diesel barges, which trade at a differential to the front- month gasoil contract on the ICE Futures Europe exchange, advanced relative to that measure, according to a similar survey of the Platts pricing window.

Diesel changed hands at premiums of $15 and $16 to February gasoil, the survey showed. That’s higher than trades yesterday at $14 to $14.50. Deals were also done at $16 and $16.50 more than March gasoil.

Three diesel cargoes changed hands, the survey showed.

Vitol Group sold a 30,000-ton diesel shipment to Total SA at a premium of $26 to March gasoil, priced for delivery to Greece’s Thessaloniki, according to the survey.

BP bought a cargo at $20 premium to February gasoil, priced for delivery to Amsterdam, according to the survey. The oil company sold a shipment at a $21 premium to March gasoil, priced for delivery to the French port of Le Havre.

Gasoil for February added 0.7 percent to $998.25 a ton at 4:59 p.m. London time on ICE. The contract expires tomorrow. March futures traded at parity to February compared with a $1 premium earlier today.

Barges of the heating oil traded at parity to February gasoil, the survey of Platts showed. That compares with a discount of $2 yesterday.

Gasoil’s crack, a measure of refining profitability, declined to $15.84 a barrel from $16.70 yesterday. Front-month Brent gained 1 percent to $118.35 a barrel on the ICE exchange.

Residues

High-sulfur fuel oil rose, trading from $691 to $697 a ton, the survey of Platts showed. That compares with deals yesterday from $680 to $685. The low-sulfur grade changed hands at $725, up from $712 yesterday.

Refineries

A hydrocracker for diesel production and so-called LC Finer unit, which converts crude residues into higher-quality fuel oil and gasoil, will be shut at the 200,000 barrel-a-day Milazzo plant in Sicily, according to a company official.

PKN Orlen SA plans to halt crude unit 3 at its 300,000 barrel-a-day Plock refinery in Poland for maintenance in July, the company said today in a presentation. An olefins plant will also be shut during this time. Olefins are products such as ethylene and propylene used to make plastics. A diesel hydro- desulphurization unit will be shut for about four weeks from March, Orlen said.

--With assistance from Lananh Nguyen, Claire Borchers 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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