Bloomberg News

ICE Gasoil at Two-Month High; Naphtha Exports Rise: Oil Products

January 10, 2013

Gasoil for February delivery rose to the highest in more than two months on the ICE Futures Europe exchange in London as temperatures are forecast to drop in Germany, Europe’s biggest market for the fuel.

European exports of naphtha and gasoline are scheduled to increase this month, according to traders and shipbrokers surveyed by Bloomberg News.

Light Products

European gasoline shipments to the U.S. East Coast and West Africa will gain in the next two weeks as demand from both regions strengthens. Traders and oil companies will charter 22 tankers to carry the fuel to the U.S. East Coast for the two weeks to Jan. 23, according to the median estimate in a survey yesterday of seven people specializing in the trade.

Eighteen were booked to load in the two-week period to Jan. 2, according to the last survey. About 40 percent of charters from northwest Europe include an option to sail to West Africa, according to Fearnleys A/S, an Oslo-based shipbroker.

Gasoline barges were bid and offered in a range of $987 to $991 a metric ton even as no trades were completed in the Amsterdam-Rotterdam-Antwerp oil hub, according to a Bloomberg survey of traders and brokers monitoring the Argus bulletin board. The fuel changed hands at $979 to $981 yesterday.

Gasoline’s crack, or premium to Brent crude, rose 4 cents to $7.07 a barrel as of 10:40 a.m. local time, according to data from PVM Oil Associates Ltd., a broker in London.

About 700,000 tons of naphtha could load this month for export from Europe to Asia, up 35 percent from 520,000 tons in December, according to the median response of five traders surveyed by Bloomberg. The highest forecast was for 1 million tons, while the lowest was 350,000 tons.

Eight vessels capable of carrying a total of 640,000 tons have already been scheduled to load in January, according to data from shipbrokers including Galbraith’s Ltd. Some fixtures are provisional and may be changed or canceled.

Naphtha’s crack, or discount to Brent, widened for the first time in four days to $5.85 a barrel, PVM data show. That’s 3 cents more than yesterday.

Middle Distillates

Gasoil for February delivery rose as much as 1.8 percent to $965.50 a ton, the highest for the contract since Oct. 19, on ICE. It was at $963.25 as of 12:42 p.m. London time. January futures, which expired at midday, were last at $964.50.

February futures were in a $5.25 a-ton backwardation, or premium, to March. The January contract settled yesterday at a 25-cent contango, or discount, to the second month.

Low temperatures in Frankfurt are forecast to drop to minus 9 degrees Celsius (16 Fahrenheit) on Jan. 16, from 4 degrees today, according to CustomWeather Inc. data on Bloomberg.

Gasoil’s crack, a measure of refining profit, grew to $16.46 a barrel versus $15.78 a barrel at 4:30 p.m. yesterday. Brent advanced 0.9 percent to $112.76 a barrel.

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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