Bloomberg News

Gasoil Barges Rise as Vitol Buys; BP Sells Jet: Oil Products

June 12, 2012

European heating oil premiums advanced as Vitol Group bought on the barge market. Gasoline for loading in northwest Europe fell to the lowest in almost six months.

BP Plc sold jet fuel on the barge market. Royal Dutch Shell Plc, Royal Vopak NV and Greenergy International Ltd. have jointly bid to convert the Coryton oil refinery in the U.K. to a storage terminal, according to a union spokesman.

Light Products

Gasoline barges for immediate loading in Amsterdam- Rotterdam-Antwerp traded from $910 to $917 a metric ton, according to a survey of brokers and traders monitoring the Argus Bulletin Board. That’s down from yesterday’s deals at $940 and $942 a ton and is the lowest since Dec. 21, data compiled by Bloomberg show.

OAO Lukoil’s Litasco sold the Eurobob grade, to which ethanol is added to make finished fuel, for a third day. Royal Dutch Shell Plc bought for a second day on the barge market where lots are typically of 1,000 tons or 2,000 tons.

Gasoline’s premium to Brent was little changed at $10.55 a barrel as of 1:34 p.m. local time, according to data from PVM Oil Associates Ltd., a broker in London.

Naphtha’s discount to Brent widened to $14.65 a barrel from $13.83 in the previous session, PVM data show. That’s the most since Nov. 14.

Middle Distillates

PetroChina Co. sold two barges of heating oil at a premium of $8 a ton to July gasoil on the ICE Futures Europe exchange in London, according to a similar survey of the Platts pricing window. That compares with a deal yesterday at parity to the June contract.

The low-sulfur grade traded at $17 a ton more than the July contract on the barge market, the survey showed. Vitol sold 8,000 tons of the product to BP.

Shell and Vitol bought jet fuel barges at premiums of $59 and $63 to July gasoil, according to the Platts survey. That compares with a deal yesterday at $60.

On diesel, 20,000 tons changed hands on the barge market at premiums from $19 to $24 to July gasoil, the survey showed. Yesterday, the product traded at $20 more than gasoil. Vitol and Morgan Stanley were the largest buyers with Litasco and Statoil ASA the main sellers.

Gasoil for July delivery fell 0.2 percent to $844 a ton as of 5:17 p.m. local time on the ICE exchange. The August contract was at $844.25 a ton.

The June contract expired today at midday London time at $856.25 a ton with a delivery of 196,500 tons, according to data on Intercontinental Exchange Inc.’s website. That compares with 403,400 tons in May and 251,600 tons in June last year.

The number of deliveries for low-sulfur gasoil rose to 94,100 tons, compared with 8,100 tons in May. That’s the most since it started trading last year.

Gasoil’s crack, a measure of refining profitability, surged 93 cents cents to $16.23 a barrel. Brent dropped 0.8 percent to $97.18 a barrel.

Residues

High-sulfur fuel oil traded at $571 to $575.50 a ton, the survey of Platts showed. That compares with $566 to $572 yesterday. The low-sulfur grade changed hands from $610 to $610.25 a ton.

Refineries

Shell, Vopak and Greenergy have offered to convert the Coryton plant to storage, Russ Ball, an official at Unite, the U.K.’s largest labor union whose members include workers at the refinery, said today by phone from Basildon, England.

Shell, Vopak and Greenergy declined to comment on the matter when contacted today.

To contact the reporter on this story: Rupert Rowling in London at rrowling@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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