Bloomberg News

Asia Gasoil Crack Gains; BP Buys Fuel-Oil Cargoes: Oil Products

March 15, 2012

Asia’s gasoil crack spread widened, signaling increased profit for refiners making the distillate fuel. BP Plc extended its fuel-oil purchases in Singapore, the region’s largest oil-trading center.

Middle Distillates

The premium of gasoil, or diesel, to Asian marker Dubai crude rose $1.04 to $16.32 a barrel at 2:36 p.m. Singapore time, according to PVM Oil Associates Ltd., a broker. This crack spread, a measure of processing profit, is the widest since Feb. 17.

Trafigura Beheer BV bought gasoil with 0.5 percent sulfur for a second day in Singapore, according to a Bloomberg survey of traders who monitored transactions on the Platts window. The Amsterdam-based trader paid a discount of 30 cents a barrel to benchmark quotes to Royal Dutch Shell Plc, for 250,000 barrels loading from March 31 to April 4.

Jet fuel’s premium to gasoil climbed 5 cents to 35 cents a barrel, PVM said. This regrade is the highest since March 5, indicating it is profitable to produce aviation fuel over diesel.

Fuel Oil

BP bought six 20,000 metric-ton cargoes of 180-centistoke (N6SHS180) fuel oil in Singapore, after purchasing at least four cargoes yesterday, according to the Bloomberg survey. The company paid $749 to $749.50 a ton to Gunvor Group Ltd. for three shipments loading March 30 to April 3 and for two cargoes for April 10 to April 14. It bought another 20,000 tons from PetroChina Co. at $749.50 a ton.

Brightoil Petroleum Holdings Ltd. bought 20,000 tons of 380-centistoke (N6SHS380) grade from Kuo Oil Ltd. at $736 a ton for April 10 to April 14 loading, the survey showed. The Hong Kong-based trader purchased two similar cargoes from ConocoPhillips, at parity to benchmark quotes and at a $1-a-ton premium.

Fuel oil increased 30 cents to $6.35 a barrel below Dubai crude, according to PVM. The discount narrowed for a fourth day, signaling reduced losses for refiners turning oil into residual products.

The premium of 180-centistoke fuel oil to 380-centistoke grade, or the viscosity spread, was unchanged for a second day at $11.50 a ton, PVM said. This means bunker, or marine fuel, moved in tandem with higher-quality fuel oil.

Light Distillates

Naphtha’s premium to London-traded Brent crude futures declined $2.77 to $122.20 a ton at 5:28 p.m. Singapore time, according to data compiled by Bloomberg. This crack spread slid from the widest in eight days.

Mabanaft GmbH & Co. sold 25,000 tons of open-specification naphtha to Vitol Group for first-half May delivery at $1,094 a ton, according to the Bloomberg survey. Vitol is the biggest reported buyer in Singapore so far this month, having purchased at least six cargoes previously.

Shell bought 50,000 barrels of 97-RON (MOGFC97S) gasoline for a second day, paying $140.60 a barrel to Total SA for April 2 to April 6 loading, the survey showed. Europe’s largest oil company also purchased the same quantity of 92-RON (MOGFC92S) grade from Vitol at $138.60 a barrel for April 9 to April 13.

Refinery News

Idemitsu Kosan Co. started the 140,000 barrel-a-day crude distillation unit at its Hokkaido refinery in northern Japan today, Kei Uchikawa, a spokesman for the company, said. The No. 1 unit was halted March 9 because of a malfunction.

Tenders

Itochu Corp. bought 35,000 tons of naphtha from Oil & Natural Gas Corp. for April loading from Hazira, according to two traders who declined to be identified because they aren’t authorized to speak to the media. The Japanese trader paid about $50 to $52 a ton more than Middle East benchmark prices.

To contact the reporter on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net


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