Bloomberg News

Asia Naphtha Crack Shrinks; BP Buys Fuel Cargoes: Oil Products

January 04, 2013

Asia’s naphtha crack spread is poised for the biggest weekly loss in eight weeks, signaling eroding profit for refiners making the petrochemical and gasoline feedstock. BP Plc (BP/) bought fuel oil cargoes in Singapore.

Light Distillates

The premium of Japan naphtha to London-traded Brent crude futures dropped 98 cents to $93.41 a metric ton at 5 p.m. Singapore time, according to data compiled by Bloomberg. This crack spread has narrowed 19 percent so far this week, the most since Nov. 9.

Glencore International Plc sold 25,000 tons of open- specification naphtha for second-half March delivery to Trafigura Beheer BV and bought a second-half April cargo from the Amsterdam-based trader, according to a Bloomberg News survey of traders who monitored transactions on the Platts window. The March cargo traded at a premium of $14.25 a ton to the April shipment.

Middle Distillates

Gasoil’s premium to Asian marker Dubai crude dropped 16 cents to $18.99 a barrel at 2:16 p.m. Singapore time, according to data from PVM Oil Associates Ltd., a broker. The difference, also known as the crack spread, is poised for a second weekly decline.

Jet fuel was down 5 cents at a discount of 15 cents a barrel to gasoil, from a 45-cent premium at the end of last week, PVM said. A negative regrade shows it is unprofitable to make aviation fuel over diesel.

Fuel Oil

BP bought two 40,000-ton cargoes of 380-centistoke high- sulfur fuel oil from Vitol Group and Brightoil Petroleum Holdings Ltd., according to the survey traders. The first shipment, for Jan. 25 to Jan. 29 loading, traded from Vitol at a premium of 25 cents a ton to benchmark quotes and the second for Jan. 30 to Feb. 3 loading, from Brightoil, changed hands at parity.

Fuel oil’s discount to Dubai crude narrowed 98 cents to $6.43 a barrel at 2:16 p.m. Singapore time, according to PVM. This crack spread is the narrowest since Oct. 29, indicating reduced losses for refiners producing residual products. It has shrunk 27 percent this week.

The premium of 180-centistoke fuel oil to 380-centistoke grade was unchanged after rising to $9.25 a ton, PVM data showed. This viscosity spread has widened 5.7 percent this week, meaning bunker, or marine fuel, increased less than supplies used in power stations.

Tenders

Formosa Petrochemical Corp. bought 100,000 to 150,000 tons of naphtha for first-half February delivery to Mailiao, Taiwan, said three traders who participate in the market, asking not to be identified because the information is confidential.

Reliance Industries Ltd. offered to sell 35,000 tons of paraffinic naphtha for January loading from Sikka, India, said two traders who asked not to be named because the information is confidential.

Hindustan Petroleum Corp. sought to export as much as 30,000 tons of motor spirit for January loading from Visakhapatnam, India, according to a tender document obtained by Bloomberg News.

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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