Bloomberg News

ICE Gasoil at Nine-Month High; KLM Sells Jet Fuel: Oil Products

February 21, 2012

Feb. 20 (Bloomberg) -- Gasoil rose to the highest price in more than nine months as Brent crude advanced amid tension in the Gulf after Iran said it halted crude exports to the U.K. and France. The heating fuel’s crack, or premium to Brent, widened.

Jet fuel barges were unchanged as Air France-KLM sold two lots. Royal Dutch Shell Plc is in talks to supply crude to Petroplus Holdings AG’s Petit-Couronne refinery in France. The deal may allow the plant to resume operations, according to a union official.

Light Products

Gasoline for immediate loading in Amsterdam-Rotterdam- Antwerp traded at $1,062 to $1,069 a metric ton, according to a survey of brokers and traders monitoring the Argus Bulletin Board and Platts pricing window. That’s the most since Sept. 8 and compares with Feb. 17 deals from $1,055 to $1,068.

Shell was the main buyer. Trafigura Beheer BV and Gunvor Group Ltd. were the main sellers of the Eurobob grade, to which ethanol is added to make the finished grade.

The fuel’s crack, or premium to Brent, widened to $7.30 a barrel from $7.28 on Feb. 17, according to data from PVM Oil Associates Ltd., a crude and refined products broker in London.

Naphtha’s discount to Brent decreased to $4.63 a barrel from $4.72 in the previous session, PVM data show.

Naphtha prices may climb because of increased demand from Asia, according to JBC Energy GmbH, a researcher in Vienna.

Demand growth for naphtha, used in gasoline and petrochemical production, is expected to gain by 146,000 barrels a day in developing nations in Asia this year versus a year ago, the researcher said today in a note.

Middle Distillates

KLM sold the barge lots of jet fuel at $54 a ton more than March gasoil, unchanged from Feb. 17, the survey of Platts showed. BP and Vitol were the buyers.

Gasoil barges changed hands at parity to March futures, according to the survey. That compares with trades as much as $2 a ton more than the March contract on Feb. 17.

The fuel for March delivery rose as much as 1.1 percent to $1,013.75 a ton on the ICE Futures Europe exchange, the most since May 3. That contract is at a $4.75 premium to April, widening the so-called backwardation from $2.75 on Feb. 17.

Gasoil’s crack, a measure of refining profitability, climbed to $15.24 a barrel from $15.07 at 4:30 p.m. on Feb. 17. Front-month Brent gained 0.5 percent to $120.20 a barrel on ICE. That’s the highest since May 4.

Net-long managed-money bets on gasoil futures and options fell to 73,526 lots in the week ended Feb. 14 from 74,596 a week earlier, according to ICE data.

Residues

High-sulfur fuel oil traded at $686.75 to $688 a ton, the survey of Platts showed. That compares with Feb. 17 deals at $682 to $684.50.

Refineries

Shell will provide the crude for six months and receive products the plant produces, Laurent Patinier, an official for the CFDT union at the site, said today by phone. The tolling deal may be signed this week, allowing the refinery to operate until a buyer is found, he said.

--With assistance from Helena Athanasiou in London. Editors: Raj Rajendran, Rachel Graham.

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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