Bloomberg News

Asia Naphtha Crack Set to Widen; BP Buys Jet Fuel: Oil Products

March 02, 2012

Asia’s naphtha crack spread is poised for the biggest increase in three weeks. BP Plc received a discount for buying jet fuel in Singapore, the region’s biggest oil-trading center.

Light Distillates

Japan naphtha’s premium to London-traded Brent crude futures dropped to $125.93 a metric ton at 3 p.m. Singapore time from $130.90 yesterday, according to data compiled by Bloomberg. This crack spread, a measure of refining profit from the gasoline and petrochemical feedstock, has risen 19 percent so far this week, set for the biggest increase since Feb. 10.

Mabanaft GmbH & Co. sold 25,000 tons of open-specification naphtha for first-half May delivery to Itochu Corp. at $1,093.50 a ton, based on a Bloomberg survey of traders who monitored transactions on the Platts window. Glencore International Plc and Vitol Group agreed to exchange a first-half April naphtha cargo for second-half April at $10 a ton.

Morgan Stanley bought 50,000 barrels of 92-RON (MOGFC92S) gasoline from Trafigura Beheer BV at $134.10 a barrel, the survey showed.

Middle Distillates

BP purchased 100,000 barrels of jet fuel from Royal Dutch Shell Plc at 50 cents a barrel below benchmark quotes, according to the Bloomberg survey. The cargo, for loading from March 17 to March 21, traded at the biggest discount reported in six weeks.

Jet fuel’s premium to gasoil rose 5 cents to 50 cents a barrel at 2:42 p.m. Singapore time, based on data from PVM Oil Associates Ltd., a broker. This regrade is down 44 percent from last week, indicating it is less profitable to produce aviation fuel over diesel.

The premium of gasoil, or diesel, to Asian marker Dubai crude fell 40 cents to $15 a barrel, PVM said. This crack spread is poised to narrow for a third week.

Trafigura bought 150,000 barrels of gasoil with 0.5 percent sulfur from Morgan Stanley for March 18 to March 22 loading, the survey showed. The price was 50 cents a barrel below quotes.

Fuel Oil

Gunvor Group Ltd. sold 20,000 tons of 380-centistoke (N6SHS380) fuel oil to PetroChina Co. at $3.50 a ton over benchmark quotes, for March 20 to March 24 loading, according to the Bloomberg survey. That’s the biggest premium reported in a week. Shell bought a similar cargo from Hin Leong Trading Pte for March 17 to March 21 at $741 a ton.

Fuel oil dropped $1.97 to $8.92 a barrel below Dubai crude at 2:42 p.m. Singapore time, based on PVM data. That’s the biggest discount since July 8. The difference is set to widen for the fourth week in five, signaling losses for refiners turning oil into residual products.

The premium of 180-centistoke (N6SHS180) fuel oil to 380-centistoke grade declined $1.25 to $10.50 a ton, PVM said. This viscosity spread is poised to narrow 4.6 percent this week, meaning bunker, or marine fuel, decreased more than higher-quality fuel oil.

Refinery News

JX Nippon Oil & Energy Corp. shut a fluid catalytic cracker at Muroran refinery in Hokkaido yesterday after a malfunction in the unit’s gas-recovery system, said an official who asked not to be identified because of company policy.

Tenders

Honam Petrochemical Corp. bought two cargoes of naphtha totaling 50,000 tons for second-half April delivery to South Korea, according to three traders who participate in the market.

Mangalore Refinery & Petrochemicals Ltd. offered to sell 40,000 tons of vacuum gasoil for May loading, based on a document e-mailed to potential buyers.

Vietnam National Petroleum Corp., or Petrolimex, sought to buy 35,000 tons of gasoil for April to June loading from Singapore, the company said in a document e-mailed to potential suppliers.

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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