Bloomberg News

Shell Buys Jet Fuel in Europe; Diesel Barges Drop: Oil Products

June 08, 2012

Royal Dutch Shell Plc bought a cargo of jet fuel in northwest for the first time this month. Diesel barges fell as BP Plc sold six lots.

Gasoil on the ICE Futures Europe exchange in London fell for a second day, trading at the lowest in 16 months after Brent crude plunged to less than $98 a barrel on concern that an economic slowdown in the U.S. and Europe will worsen, curbing fuel demand.

Light Products

Greenergy International Ltd. bought a gasoline cargo from Vitol Group at $934 a metric ton for delivery to the U.K., according to a survey of brokers and traders monitoring the Platts pricing window, which ends at 4:30 p.m. London time.

Statoil ASA sold a cargo to Harvest Energy Ltd. at $920 a ton, also to the U.K., the survey showed. That compares with a trade on May 29 at $1,019 for delivery to the Thames.

Gasoline for immediate loading in Amsterdam-Rotterdam- Antwerp traded at $913 to $917 a ton, according to a similar survey of the Argus Bulletin Board. That’s the lowest price since Dec. 21 and compares with yesterday’s $930 to $959 range.

The trades are for Eurobob grade to which ethanol is added to make finished fuel and are typically for lots of 1,000 tons or 2,000 tons.

Gasoline’s premium to Brent increased 11 cents to $9.78 a barrel as of 2:01 p.m. local time, according to data from PVM Oil Associates Ltd., a broker in London.

Naphtha’s discount to Brent widened to $13.90 a barrel from $13.38 yesterday, PVM data show. That’s the most since Nov. 14.

Middle Distillates

Shell purchased the jet fuel cargo from BP for delivery to Rotterdam at $1 less than European benchmark prices, the survey of Platts prices showed. That compares with a deal on May 31 at a $2 premium for delivery to France.

Diesel barges changed hands thirteen times at a premium of $14 a ton to June gasoil, the survey showed. That’s lower than yesterday’s deals at $15 to $16. BP was the main seller. Vitol and Morgan Stanley were the biggest buyers.

Barges of heating oil traded at parity to discounts of $1 a ton to June gasoil, it showed. That’s in line with yesterday.

Gasoil for June delivery dropped 1.5 percent to $846.25 a ton as of 5:16 p.m. local time on the ICE exchange. Earlier in the day, it traded at $839.75 a ton, the lowest intraday price since Feb. 7, 2011. The July contract was at $843 a ton, narrowing the discount to $3.25 from $4.50 yesterday.

Gasoil’s crack, a measure of refining profitability, rose to $15.23 a barrel from $14.70 yesterday, ICE data show. Brent dropped 2.1 percent to $97.89 a barrel.

Residues

High-sulfur fuel oil traded at $562 to $565 a ton, the survey of Platts showed. That compares with $571.25 to $577 yesterday. The low-sulfur grade changed hands at $604, down from $618 to $618.50 in the previous session.

Refineries

Anonima Petroli Italiana SpA, the Italian refiner known as API, plans to shut its 78,000 barrel-a-day Falconara facility for one year from Jan. 1, 2013, according to a company official. The halt will facilitate the upgrade of a power station on the site to run on natural gas, the official said today by phone from Rome, declining to be identified because of company policy.

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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