Bloomberg News

Asia Gasoil Crack Falls, Hin Leong Buys Jet Fuel: Oil Products

July 06, 2012

Asia’s gasoil crack spread fell, signaling reduced profit for refiners. Hin Leong Trading Pte bought two jet-fuel cargoes in Singapore, the region’s largest oil-trading center.

Light Distillates

Japan naphtha’s premium to London-traded Brent crude futures fell $29.18 to $70.50 a metric ton at 6:06 p.m. Singapore time, according to Bloomberg calculations based on data from PVM Oil Associates Ltd., a broker. The spread, a measure of refining profitability for the fuel, is poised for a weekly gain.

Gracewood International Ltd. sold a 50,000-barrel cargo of 95-RON gasoline to Royal Dutch Shell Plc. at $110 a barrel, according to Bloomberg News survey of traders who monitored transactions on the Platts window. Shell sold a similar cargo to BP Plc at $109.70 a barrel. PetroChina Co. sold Vitol Group a same-grade cargo for $109.95 a barrel.

Middle Distillates

Gasoil’s premium to Asian benchmark Dubai crude fell $2.79 to $16.75 a barrel at 2 p.m. Singapore time, PVM data showed. The gap, also known as the crack spread, is poised to decline for a second week.

Jet fuel’s premium to gasoil was unchanged after rising to $1 a barrel. The regrade is poised to rise first time in three weeks, meaning it’s more profitable to make aviation fuel over diesel.

BP bought a 150,000-barrel gasoil cargo from SK Innovation Co. at a premium of 20 cents a barrel over the benchmark prices, according to the survey. The cargo is for July 27 to July 31 loading.

Hin Leong bought a 100,000-barrel cargo of jet fuel from BP at a premium of 10 cents over the benchmark prices. The cargo is for July 24 to July 28 loading. Hin Leong also purchased another same quantity cargo from JP Morgan Ventures at same premium for Aug 1 to Aug 5 loading.

Fuel Oil

Fuel oil’s discount to Dubai crude widened 75 cents to $1.91 a barrel, according to PVM. The difference widened for the first time in three days and is headed for a second weekly fall, indicating widening losses from processing crude into residual products.

The premium of 180-centistoke fuel oil to 380-centistoke grade rose 25 cents to $10.75 a ton, PVM data showed. This viscosity spread is rising for a second week, showing bunker, or marine fuel, gained less than supplies used in power stations.

Tenders:

Bharat Petroleum Corp. offered to sell 30,000 tons of fuel oil for loading from July 8, according to a tender document obtained by Bloomberg News.

Qatar International Petroleum Marketing Co., known as Tasweeq, offered to sell 40,000 tons of jet fuel loading Aug. 28 to Aug. 29, according to a notice sent to potential buyers.

PetroChina sold 60,000 tons of gasoil to Indian Oil Corp., said two traders who asked not to be identified because the information is confidential. The Indian refiner paid a premium of about $7.30 to $7.50 a barrel to Middle East prices for the cargo, they said.

Refineries:

Showa Shell Sekiyu K.K. will process 6.94 million kiloliters of crude for domestic markets in the three months ending September, a reduction of 7 percent from year earlier, according to a statement on its website. The company plans to process a total of 17 percent less crude at its four refineries in Japan, including crude for global markets, the statement said. Showa Shell plans to conduct scheduled maintenance at its Yamaguchi refinery during the period.

To contact the reporter on this story: 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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