Bloomberg News

Fuel-Oil Premium Widens; Hin Leong Trades Gasoil: Oil Products

June 14, 2012

Asia fuel oil extended gains over crude, signaling increased profit for refiners making residual fuels. Hin Leong Trading Pte bought and sold gasoil cargoes in Singapore, the region’s largest oil-trading center.

Fuel Oil

Fuel oil’s premium to Asian benchmark Dubai crude widened 46 cents to 83 cents a barrel at 6:07 p.m. Singapore time, according to data from PVM Oil Associates Ltd., a broker. The difference widened for a seventh day, the longest rising streak since December 2008.

Hin Leong bought two 20,000 metric-ton cargoes of 380- centistoke fuel oil from PetroChina Co., according to a Bloomberg News survey of traders who monitored transactions on the Platts window. One shipment, for July 4 to July 8 loading, changed hands at $3.50 a ton over benchmark quotes, and the second traded at a $3.75 premium for July 9 to July 13.

The premium of 180-centistoke fuel oil to 380-centistoke grade declined 25 cents to $11.75 a ton, PVM said. A narrowing viscosity spread means bunker, or marine fuel, fell less than fuel oil used in power stations.

Middle Distillates

Hin Leong bought two 150,000-barrel cargoes of gasoil, or diesel, with 0.5 percent sulfur at 30 cents a barrel above July prices, according to the Bloomberg survey. China International United Petroleum & Chemical Co., or Unipec, sold one shipment for July 1 to July 5 loading and Glencore International Plc sold the other for July 4 to July 8.

Hin Leong sold 240,000 barrels of the same grade of gasoil to Brightoil Petroleum Holdings Ltd. for June 29 to July 3 loading, the survey showed. The transaction was at a 30-cent premium to prices for June 28 to July 4.

Gasoil’s premium to Dubai crude dropped 7 cents to $15.68 a barrel at 2:07 p.m. Singapore time, PVM data showed. This crack spread, a gauge of refining profit, narrowed for the third day this week.

Jet fuel’s premium to gasoil climbed 10 cents to $1.10 a barrel, PVM said. That’s the highest regrade so far this month, indicating it is more profitable to make aviation fuel over diesel.

Light Distillates

Japan naphtha’s premium to London-traded Brent crude futures fell $4.72 to $2.51 a ton at 5:11 p.m. Singapore time, according to data compiled by Bloomberg. This crack spread, a measure of the profit from making the petrochemical and gasoline feedstock, dropped for a third day, the longest losing streak since June 4.

Glencore sold 25,000 tons of open-specification naphtha for first-half August delivery to Noble Group Ltd. at $740 a ton, according to the Bloomberg survey. Total SA bought a similar cargo from Royal Dutch Shell Plc at the same price.

Total also bought 50,000 barrels of 92-RON gasoline for July 10 to July 14 loading from Vitol Group at $102.50 a barrel, the survey showed. BP Plc sold a similar-sized cargo of 95-RON grade for July 5 to July 9 to Shell at $105.10 a barrel.

Refinery News

China Petroleum and Chemical Corp., or Sinopec, shut 16 units at its Wuhan refinery for maintenance as of June 12, parent China Petrochemical Corp. said in an online newsletter. These include the No. 2 crude distillation, No. 1 catalytic and No. 2 coking units. The repair work is the only one planned in the five years through 2015.

Tenders

Qatar International Petroleum Marketing Co., known as Tasweeq, offered to sell about 30,000 tons of 97-RON gasoline for July loading from Mesaieed, according to a notice sent to potential buyers.

Formosa Petrochemical Corp. offered to sell 480,000 barrels of gasoil with 500 parts-per-million of sulfur for July loading from Mailiao, an official said today, asking not to be identified because of internal policy.

Formosa Petrochemical sold 12,000 tons of low-sulfur fuel oil for June loading at a premium of $65 to $75 a ton to Singapore prices, according to three traders with knowledge of the transaction.

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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