Bloomberg News

Jet Fuel Rises as BP Buys; European Diesel Falls: Oil Products

February 22, 2012

Feb. 22 (Bloomberg) -- Jet fuel barges advanced to the highest price in more than a week in northwest Europe as BP Plc bought. Diesel fell, trading for the first time this week.

Fuel oil rose. Hellenic Petroleum SA plans to start its Elefsis refinery in Greece in the second quarter.

Light Products

Gasoline for immediate loading in Amsterdam-Rotterdam- Antwerp traded at $1,075 to $1,077 a metric ton, according to a survey of brokers and traders monitoring the Argus Bulletin Board. That’s the highest price since Sept. 7 and compares with deals yesterday from $1,062 to $1,066.

Cargill Inc. purchased barge lots. Gunvor Group Ltd. sold the Eurobob grade, to which ethanol is added to make the finished grade.

The fuel’s crack decreased to $7.55 a barrel from $8 yesterday, according to data from PVM Oil Associates Ltd., a London-based broker. Naphtha’s discount to Brent widened to $4.48 a barrel from $4.04 yesterday, PVM data show.

Middle Distillates

BP bought the jet fuel barge from Royal Dutch Shell Plc at a $58 premium to March gasoil, according to a similar survey of the Platts pricing window. That’s the highest difference since Feb. 9 and compares with a trade yesterday at $55.

A diesel barge changed hands at $14.50 a ton more than March gasoil, according to the survey. That compares with Feb. 17 trades at premiums of $19 to $20.

Gasoil barges traded at discounts of 25 cents to $1 a ton to March futures, the survey showed. That’s in line with yesterday.

Gasoil for March delivery gained for a third day, rising 0.8 percent to $1,022 a ton at 5:06 p.m. London time on the ICE Futures Europe exchange. The contract for April delivery was $1 cheaper than March, narrowing the backwardation by 25 cents.

Backwardation is a price structure where near-term supplies are more expensive than later-dated deliveries and may signal an immediate supply shortage or rapid increase in demand.

Gasoil’s crack, a measure of refining profitability, dropped to $14.36 a barrel from $15.37 at 4:30 p.m. yesterday. Front-month Brent added 0.9 percent to $122.69 a barrel on the ICE exchange.

Residues

High-sulfur fuel oil traded at $697 to $700 a ton, the survey of Platts showed. That compares with yesterday’s deals at $686 to $689.25.

Refineries

Hellenic plans to start its Elefsis refinery in Greece next quarter, resuming operations for the first time in at least a year, after tying in new processing equipment.

OMV AG, central Europe’s biggest oil company, said today it plans to shut its Petrobrazi refinery in Romania for six weeks of maintenance in the second quarter.

--With assistance from Helena Athanasiou and Claire Borchers 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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