Bloomberg News

European Gasoline at 10-Week High; Jet Fuel Gains: Oil Products

July 20, 2012

European gasoline rose to the highest level in 10 weeks as Royal Dutch Shell Plc (RDSA) and Vitol Group bought barges.

Jet fuel’s premium gained versus August gasoil on the ICE Futures Europe exchange in London. Barges of fuel oil, diesel and heating oil declined as Brent crude slumped.

Light Products

Gasoline barges for immediate loading in Amsterdam- Rotterdam-Antwerp traded at $1,010 to $1,020 a metric ton, according to a survey of traders and brokers monitoring the Argus Bulletin Board and Platts pricing window. That’s the most since May 10 and compares with yesterday’s trades at $1,005 to $1,014, according to data compiled by Bloomberg.

OAO Lukoil’s Litasco unit and Cargill Inc. also bought the Eurobob grade, to which ethanol is added to make finished fuel. Morgan Stanley was the main seller for a second day. Barges are typically lots of 1,000 or 2,000 tons.

Gasoline’s premium to Brent, or crack, rose 33 cents to $13.16 a barrel as of 4:40 p.m. local time, according to data from PVM Oil Associates Ltd., a broker in London.

Naphtha’s discount to Brent widened to the biggest spread in a week at $9.58 a barrel from $9.50 yesterday, PVM data show.

Middle Distillates

Vitol sold a barge of aviation fuel to Morgan Stanley at a $73 a ton premium to August gasoil on the ICE futures Europe exchange, the Platts survey showed. That’s up from deals at $68 on July 18. Vitol also vended a 30,000 ton cargo of jet fuel to BP Plc (BP/) at parity to the northwest Europe benchmark.

Ultra-low-sulfur diesel barges declined, changing hands at $29 a ton more than August gasoil, the survey showed. That’s down from deals yesterday at $34 and $36. North Sea Group sold one shipment to Mocoh SA.

Omneo Trading bought a barge of heating oil from Vitol at a $4 discount to August gasoil, compared with trades at minus $3 to $3.25 on July 18.

Gasoil for August delivery dropped for the first time in six days. The contract fell $7.50, or 0.8 percent, to $918.25 on the ICE exchange as of 4:55 p.m. London time. The September contract was at $917.25. That reduced the front-month’s premium, or backwardation, to $1 from $2.50 yesterday.

The product’s crack, a measure of refining profitability, rose to $16.78 a barrel at 4:30 p.m. versus $16.65 yesterday. Brent lost 1.5 percent to $106.17 a barrel on ICE.

Residues

High-sulfur fuel oil traded at $610 to $613 a ton, the survey of Platts showed. That compares with $614.50 to $616 yesterday. The low-sulfur grade changed hands at $658 to $661 a ton, compared with $666 yesterday.

Tender

Libya’s National Oil Corp., the state-run energy company, issued a tender to buy as much as 75,000 metric tons of gasoil for delivery in August, according to a document received by Bloomberg News.

The country is seeking to purchase two to three 25,000 ton cargoes via the tender, which closes today, the document showed.

To contact the reporter on this story: Lananh Nguyen in London at lnguyen35@bloomberg.net

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


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