Bloomberg News

Shell Buys Jet Fuel, Diesel Cargoes; Naphtha Drops: Oil Products

May 16, 2012

Royal Dutch Shell Plc bought a jet fuel cargo in northwest Europe for at least a third day. It purchased two diesel cargoes for delivery to Turkey.

Naphtha’s discount to Brent crude widened to the most in more than five months.

Light Products

Gasoline barges for loading in Amsterdam-Rotterdam-Antwerp traded from $995 to $1,005 a metric ton, according to a survey of brokers and traders monitoring the Argus Bulletin Board and Platts pricing window. That compares with yesterday’s deals at $1,004 to $1,017. The fuel last traded below $1,000 on Feb. 3, data compiled by Bloomberg show.

Total SA was the main seller of the Eurobob grade to which ethanol is added to make finished fuel. Barge deals are typically for lots of 1,000 tons or 2,000 tons.

Gasoline’s crack, or premium to Brent, dropped to $8.06 a barrel as of 2:45 p.m. local time, according to data from PVM Oil Associates Ltd., a refined-products broker in London. That compares with $8.22 yesterday.

Naphtha’s discount to Brent widened to $11.42 a barrel from $11.35 yesterday, PVM data show. That’s the widest spread since Nov. 30.

“The glut of naphtha in Europe is not being cleared,” Olivier Jakob, managing director at Petromatrix GmbH, a Zug, Switzerland-based researcher, said today in a note. “European naphtha needs to go to a deeper discount to push itself out to the Far East.”

Middle Distillates

Shell bought the diesel cargoes at premiums of $33 and $37 a ton to June gasoil for delivery to Aliaga in Turkey, according to the survey of Platts. Yesterday, a trade took place at a premium of $24.50 for delivery to Lavera in France.

A diesel barge changed hands at $15.50 a ton more than June gasoil, according to the survey. That’s higher than deals yesterday at $14 to $15.

Shell purchased the jet fuel cargo from Vitol Group at a $2.50 premium to benchmark prices for delivery to Le Havre in France, the survey showed.

Jet fuel barges traded at premiums of $74 and $75 a ton to June gasoil, it showed. That’s little changed from yesterday.

Gasoil for June delivery fell $1.25 to $931 a ton as of 5:46 p.m. local time on the ICE Futures Europe exchange in London. The July contract was at $927.75, causing the discount to front-month futures, or backwardation, to widen to $3.25 from $2.50 yesterday.

Gasoil’s crack, a measure of refining profitability, fell to $13.33 a barrel from $13.53 yesterday. Brent declined 0.6 percent to $111.62 a barrel.

Residues

Low-sulfur fuel oil traded at $673 and $674.50 a ton, the survey of Platts showed. That compares with yesterday’s deals at $674 to $676.75.

Refineries

The Coryton refinery in the U.K., which is operating under a tolling deal that is scheduled to expire at midnight, will receive its second crude cargo in as many days, according to IHS Inc. ship-tracking data compiled by Bloomberg.

The Eagle Tucson is scheduled to arrive in Coryton later today, the IHS ship-tracking data show. It is sailing from Teesport in northeast England and carried about 586,000 barrels of fuel on its last voyage, the data show.

To contact the reporter on this story: 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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