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BP Buys Eighth Diesel Cargo; Jet Fuel Barges Fall: Oil Products

April 17, 2012

BP Plc purchased a cargo of diesel for delivery to the U.K for a second day, bringing its tally for this month to eight lots. The differential between heating oil barges and gasoil futures narrowed as North Sea Group bought.

Jet fuel barge premiums fell for at least a second day. Eni SpA said it will shut parts of its Gela refinery for a year because of reduced demand for fuels.

Light Products

Gasoline for immediate loading in the Amsterdam-Rotterdam- Antwerp region traded from $1,124 to $1,153 a metric ton, according to a survey of brokers and traders monitoring the Argus Bulletin Board and the Platts pricing window. That’s lower than yesterday’s range from $1,138 to $1,173 a ton.

Gunvor Group Ltd., Morgan Stanley, Chevron Corp. and Hess Corp. were the main sellers of the Eurobob grade to which ethanol is added to make finished fuel.

The product’s crack, a measure of refining profitability, fell 65 cents to $14.30 a barrel, according to data from PVM Oil Associates Ltd., a London-based crude and refined-products broker, as of 2:48 p.m. local time.

Naphtha’s discount to Brent widened to $4.72 a barrel from $4.50 in the previous session, PVM data show.

Middle Distillates

BP bought 30,000 tons of diesel for delivery to the north- eastern England port of Immingham from Royal Dutch Shell Plc, the survey of Platts showed. The trade was done at a $27-premium to May gasoil on the ICE Futures Europe exchange in London. That compares with yesterday’s trade to the same port at $12 more than the May low-sulfur gasoil contract.

In the Mediterranean, Repsol YPF SA sold a shipment of as much as 30,000 tons to PetroChina Co. for delivery to Lavera in the south of France. The deal changed hands at $28 more than May gasoil, $1 a ton lower than yesterday’s deal.

Jet fuel barge traded at premiums of $66 and $66.50 a ton to May gasoil, according to the survey. That’s less than yesterday’s deal at $67.

Heating oil barges traded at parity and discounts of 50 cents and $1 to May gasoil as 14,000 tons changed hands, the survey showed. North Sea Group was the largest buyer with Shell the main seller.

On the lower sulfur barges, North Sea Group sold 10,000 tons to BP at premiums of $9 and $10 to gasoil futures.

May gasoil dropped $2 to $992 a ton as of 5:22 p.m. London time on the ICE exchange. The June contract was at $989.75 a ton, keeping the market in backwardation for a third day.

Backwardation describes a market where contracts closest to expiry cost more than later-dated shipments. It can signal an increase in immediate demand or fall in supply.

Gasoil’s crack, a measure of refining profitability, was little changed at $14.51 a barrel as of 4:30 p.m. London time. Brent crude fell 0.3 percent to at $118.32 a barrel.

Residues

High-sulfur fuel oil traded from $680 to $682.50 a ton, the survey of Platts showed. That compares with deals from $680.75 to $683 yesterday.

Refineries

Eni, Italy’s largest oil company, said today in an e- mailed statement that the halt will include less-profitable units, without being more specific. The shutdown will affect 500 workers, it said.

Neste Oil Oyj started maintenance today at its Naantali facility that will last at least two months.

“The plan is to have the site back online at the beginning of June,” Elina Herrala, the 50,000 barrel-a-day refinery’s manager, said in an e-mailed statement. “We will also carry out a number of environmental and safety-related investments.”

Egypt’s largest refinery, a 146,300 barrel-a-day plant in the port city of Suez, will resume operations within a week after fires at its naphtha tanks, a company official said.

To contact the reporter on this story: Rupert Rowling in London at rrowling@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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