Bloomberg News

Asia Gasoil Crack Narrows; Hin Leong Sells Fuel: Oil Products

March 13, 2012

Asia’s gasoil crack spread shrank, signaling reduced profit for refiners making the distillate fuel. Hin Leong Trading Pte sold fuel oil for a second day in Singapore, the region’s largest oil-trading center.

Middle Distillates

The premium of gasoil, or diesel, to Asian marker Dubai crude fell 37 cents to $15.35 a barrel at 2:41 p.m. Singapore time, according to PVM Oil Associates Ltd., a broker. This crack spread, a measure of processing profit, is the narrowest in three days.

Morgan Stanley sold 150,000 barrels of gasoil with 10 parts-per-million of sulfur to BP Plc for loading from March 28 to April 1, according to a Bloomberg survey of traders who monitored transactions on the Platts window. The cargo changed hands at $3.10 a barrel over prices for 0.5 percent sulfur grade.

Jet fuel’s premium to gasoil dropped 5 cents to 10 cents a barrel, PVM said. This regrade is the lowest since Feb. 20, indicating it is less profitable to produce aviation fuel over diesel.

Fuel Oil

Hin Leong sold 20,000 metric tons of 380-centistoke (N6SHS380) fuel oil to Gunvor Group Ltd. at $738 a ton, according to the Bloomberg survey. Mercuria Energy Ltd. purchased 25,000 tons of the same grade from Koch Industries Inc. at $739 a ton. Both shipments are for March 28 to April 1 loading.

Fuel oil declined 15 cents to $7.81 a barrel below Dubai crude at 2:41 p.m. Singapore time, according to PVM. The discount widened for the fifth time in six days, signaling losses for refiners turning oil into residual products.

The premium of 180-centistoke (N6SHS180) fuel oil to 380-centistoke grade decreased 50 cents to $9.75 a ton, PVM said. This viscosity spread is the narrowest since Feb. 20, meaning bunker, or marine fuel, increased more than higher-quality fuel oil.

Light Distillates

Naphtha’s premium to London-traded Brent crude futures increased $1.03 to $119.47 a ton at 5:16 p.m. Singapore time, according to data compiled by Bloomberg. The difference, also known as the crack spread, is the widest in five days.

Glencore International Plc sold 25,000 tons of open- specification naphtha to Vitol Group for first-half May delivery at $1,085.50 a ton, according to the Bloomberg survey. Glencore sold the petrochemical feedstock to Vitol at least four times previously this month.

Refinery News

Idemitsu Kosan Co. plans to start a 140,000 barrel-a-day crude distillation unit at its Hokkaido refinery in northern Japan by the end of this week, said company spokesman Kei Uchikawa. The no. 1 unit was halted March 9 due to a malfunction.

To contact the reporter on this story: Yee Kai Pin in Singapore at

To contact the editor responsible for this story: Mike Anderson at

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