Bloomberg News

BP Buys Diesel in Europe; Naphtha Cargo Declines: Oil Products

April 19, 2012

BP Plc bought a diesel cargo in northwest Europe, its ninth this month. Gasoil gained as stockpiles fell for a second week. The front-month premium to the June contract on the ICE Futures Europe exchange was at the widest in two months.

Naphtha cargoes traded at a lower price. Royal Dutch Shell Plc is starting units this week at its Pernis oil refinery, Europe’s largest, said two people with knowledge of the work.

Light Products

BP bought a naphtha cargo from Trafigura Beheer BV at $1,009 a metric ton, according to a survey of traders and brokers monitoring the Platts pricing window. That compares with a trade at $1,053 on April 10.

Naphtha’s discount to Brent shrank to $5.40 a barrel as of 1:46 p.m. London time from $5.56 yesterday, according to data from PVM Oil Associates Ltd., a U.K. broker.

Gasoline for immediate loading in the Amsterdam-Rotterdam- Antwerp region traded from $1,104 to $1,126 a ton, according to a similar survey of the Argus Bulletin Board. That’s within yesterday’s range of $1,097 to $1,137. The trades are for Eurobob grade to which ethanol is added to make finished fuel.

Gasoline’s premium to Brent crude fell to $12.42 a barrel from $12.68 yesterday, PVM data shows.

Middle Distillates

BP bought the cargo from Shell for delivery to Koper in Slovenia, partly priced at a premium of $13 a ton to the ICE low-sulfur gasoil contract, according to the survey of Platts. That compares with an April 16 deal at $12 to the U.K.

Diesel barges changed hands at premiums of $19 to $20.50 a ton to May gasoil, the survey showed.

Gasoil for delivery in May gained 1.1 percent to $996.50 a ton as of 5:05 p.m. London time on ICE. The contract earlier rose to as much as $1,001.

May’s premium to June widened to $4.50 a ton, the most for front-month contracts since mid-February, excluding expiry day anomalies. That keeps the market in backwardation for a fifth day, a price structure where near-term supplies are more expensive than later-dated shipments and can signal an increase in immediate demand or fall in supply.

“ICE gasoil is trying to regain the $1,000 a ton level and that will be a resistance to watch as the backwardation in ICE gasoil is starting to increase,” Olivier Jakob, managing director of Switzerland-based consultant Petromatrix GmbH, said today in a note. Front-month futures traded at more than $1,000 a ton today for the first time in three days.

Stockpiles fell 0.5 percent to 2.61 million tons in the week to today, according to PJK International BV.

Gasoil’s crack fell to $14.83 a barrel versus $15.15 at 4:30 p.m. yesterday. Brent crude advanced 0.2 percent to $118.16 a barrel.

Gasoil barges traded at discounts of $1 and $3 a ton to futures prices, according to the survey. That compares with a deal yesterday at $2.

Residues

High-sulfur fuel oil traded from $675.25 to $677 a ton, up from $669.25 to $672 yesterday, the survey of Platts showed. The low sulfur grade traded at $729 a ton.

Fuel oil stockpiles fell to a three-month low this week as a cargo was shipped to Singapore, according to PJK. The stocks dropped 24 percent to 598,000 tons, the lowest since Jan. 12.

Refineries

A platformer and hydro-desulfurization unit 3 at Shell’s Pernis refinery are resuming operations while maintenance on HDS 1 and HDS 2 will begin early next week, the people said, declining to be identified because they aren’t authorized to speak publicly on the matter. The work on HDS 3 started in late March and repairs on the other HDS units will last until May 27, one of the people said.

Russian refiners shut at least 786,000 barrels a day of crude distillation capacity as of April 13, according to Bloomberg calculations based on an e-mail from the Russian Energy Ministry’s CDU-TEK unit.

To contact the reporters on this story: Lananh Nguyen in London at lnguyen35@bloomberg.net 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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