Bloomberg News

Asia Naphtha Crack Rises; Brightoil Buys More Fuel: Oil Products

May 17, 2012

Asia’s naphtha crack spread rebounded, signaling higher profits for refiners making the petrochemical feedstock. Brightoil Petroleum Holdings Ltd. extended its fuel- oil purchases in Singapore.

Light Distillates

The premium of Japan naphtha to London-traded Brent crude futures rose to $61.04 a metric ton at 4:58 p.m. Singapore time from $49.37 yesterday, according to data compiled by Bloomberg. Yesterday’s crack spread was the narrowest since Nov. 28.

Royal Dutch Shell Plc, the biggest reported seller of 92- RON gasoline in Singapore this month, sold 50,000 barrels to Gunvor Group Ltd. at $117.46 a barrel, according to a Bloomberg News survey of traders who monitored transactions on the Platts window. The cargo is for June 1 to June 5 loading. Shell sold the same quantity for June 6 to June 10 to PetroChina Co. at $117 a barrel.

PetroChina also bought 50,000 barrels of 92-RON grade loading June 1 to June 5 from Morgan Stanley at $117.50 a barrel, the survey showed.

Fuel Oil

Brightoil bought three 20,000-ton cargoes of 380-centistoke fuel oil from Gunvor, PetroChina and Vitol Group at $664, $663.25 and $662.50 a ton, respectively, according to the Bloomberg survey. The shipments are for June 1 to June 5, June 6 to June 10 and June 12 to June 16 loading. The Hong Kong-based trader has purchased at least 540,000 tons so far this month in Singapore, the region’s largest oil-trading center.

Fuel oil’s discount to Asian benchmark Dubai crude widened 59 cents to $4.63 a barrel at 2:54 p.m. Singapore time, according to data from PVM Oil Associates Ltd., a broker. The difference increased for the first time in four days, indicating bigger losses for refiners turning oil into residual products.

The premium of 180-centistoke fuel oil to 380-centistoke grade climbed $1 to $10.50 a ton, PVM said. This viscosity spread widened the most since March 13, showing bunker, or marine fuel, decreased more than higher-quality fuel oil.

Singapore’s onshore stockpiles of residual fuels fell to 18.37 million barrels in the week to yesterday, according to a unit of the Ministry of Trade and Industry. That’s the lowest in four weeks.

Middle Distillates

The premium of gasoil, or diesel, to Dubai crude rose 29 cents to $16.23 a barrel at 2:54 p.m. Singapore time, according to PVM. That’s the widest crack spread so far this week.

Jet fuel’s premium to gasoil was at 65 cents a barrel, PVM data showed. This regrade yesterday was the lowest in eight days, signaling it was less profitable to make aviation fuel over diesel.

Refinery News

Bangchak Petroleum Pcl will shut its refinery for annual maintenance from May 25 to June 23, according to President Anusorn Sangnimnuan. The company plans to upgrade the plant’s catalyst to improve product quality and raise production this year to 98,000 barrels a day, he said.

Tenders

Bharat Petroleum Corp. offered to sell 10,000 tons of naphtha for in June loading from Haldia, said two traders who declined to be identified because they aren’t authorized to speak with the media.

PV Oil Corp. in Vietnam sought to buy May and June shipments of gasoil with 0.05 percent sulfur, the company said in a document e-mailed to potential suppliers.

To contact the reporters on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net; Ann Koh in Singapore at akoh15@bloomberg.net; Winnie Zhu in Singapore at wzhu4@bloomberg.net

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


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