Bloomberg News

Asian Gasoil Crack Set for Fourth Weekly Decline: Oil Products

May 25, 2012

Asia’s gasoil crack spread narrowed, heading for a fourth weekly decline, signaling widening losses for refiners making the distillate fuel. Fuel-oil swaps rose.

Middle Distillates

The premium of gasoil, or diesel, to Asian marker Dubai crude fell 98 cents to $15.10 a barrel at 12 p.m. Singapore time, according to data from PVM Oil Associates Ltd., a broker. This crack spread, a measure of processing profit, is poised to narrow for a fourth week.

Gasoil swaps for June were unchanged after dropping to $118.70 a barrel, PVM said. Prices are headed for the 10th weekly decline in 11 weeks. Jet fuel’s premium to gasoil was unchanged after climbing to $1.20. This regrade is set for the second weekly gain in three, indicating it has been more profitable to produce aviation fuel over diesel.

Fuel Oil

High-sulfur fuel-oil swaps for June increased $5.25, or 0.8 percent, to $653 a metric ton, according to PVM. Prices are headed for the first weekly advance in four.

Fuel oil was at a discount of 77 cents a barrel to Dubai crude, PVM data showed. The gap is poised to narrow for the seventh week in eight, showing reduced losses for refiners turning crude into residual products.

The premium of 180-centistoke fuel oil to 380-centistoke grade, or the viscosity spread, was unchanged after rising to $12.25 a ton, PVM said. This means bunker, or marine fuel, moved in tandem with power-station fuel oil.

Light Distillates

Naphtha’s premium to London-traded Brent crude futures was up $12.74 at $53.99 a ton, according to data compiled by Bloomberg. The difference, also known as the crack spread, rebounded from the narrowest since Nov. 29.

Naphtha swaps for June were at $853.50 a ton, PVM data showed. The petrochemical and gasoline feedstock is set to decrease for a 12th week.

Gasoline’s premium to naphtha yesterday climbed to $21.40 a barrel, the highest since April 30, data compiled by Bloomberg showed. A widening reforming margin signals it is more profitable to make motor fuel.

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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