Bloomberg News

Glencore Buys More European Naphtha; Diesel Falls: Oil Products

January 31, 2013

Glencore International Plc (GLEN) bought a cargo of European naphtha, bringing its purchases to at least 12 since the start of last week. Vitol sold at least 29 cargoes of the fuel this month.

Royal Dutch Shell Plc (RDSA) offloaded a cargo of European diesel at a lower premium to February gasoil on the ICE Futures Europe exchange in London. JPMorgan Chase & Co. was the most active seller of heating oil in the barge market.

Light Products

Naphtha cargoes traded from $960 to $966 a metric ton, compared with $961 a ton yesterday, according to a survey of traders and brokers monitoring the Platts pricing window. Vitol sold to Glencore and Trafigura Beheer BV. The fuel gained 3 percent this month.

Naphtha’s crack, or discount to Brent crude, widened to $7.46 a barrel, as of 1:58 p.m. local time, according to PVM Oil Associates Ltd., a London-based broker. That’s the biggest loss in more than a week.

Gasoline in the Amsterdam-Rotterdam-Antwerp oil hub traded from $1,056 to $1,062 a ton, according to the survey. The fuel changed hands at as much as $1,068 yesterday, the highest since Oct. 12. The Eurobob grade, to which ethanol is added before being sold at the pump, advanced 12 percent so far this year.

Total SA (FP) sold 10,000 tons, extending its selling spree to a seventh session. Trafigura was a buyer and seller. Gunvor Group Ltd., Shell, BP Plc (BP/) and OAO Lukoil’s Litasco unit bought barges, which typically comprise 1,000 and 2,000 tons.

Gasoline’s crack, or premium to Brent, rose to $14.04 a barrel, PVM data showed. That’s the most since Sept. 28.

Middle Distillates

BP Plc bought a cargo of diesel, its second purchase from Shell this week, according to the Platts survey. The shipment changed hands at a $9 premium to February gasoil for delivery to Amsterdam. That’s down from a trade at $13 on Jan. 29.

Barges of the fuel changed hands at $6 and $7 more than February gasoil, the survey showed. That matches yesterday’s three-year low. Glencore, JPMorgan and Shell were vendors to Vitol and Total. The premiums slumped 61 percent this month.

Air France-KLM sold one barge of jet fuel to Morgan Stanley at $78 a ton more than February gasoil, the Platts survey showed. That’s up from a deal at $72 on Jan. 22.

A free-trade agreement between the European Union and Singapore that removes taxes on jet fuel and diesel imports to the continent will come into force as early as 2014, potentially boosting petroleum shipments to the EU.

The full ratification process will take about two years from Dec. 16, when a draft deal was reached, the Singapore Trade Ministry said yesterday in an e-mail. The pact is similar to an accord between the EU and South Korea that led to an unprecedented flow of North Sea crude oil to the Asian nation.

JPMorgan was the main seller of gasoil and low-sulfur heating oil, while Gunvor and Shell also sold, the Platts survey showed. Vitol, Morgan Stanley and Trafigura bought. The higher- sulfur fuel changed hands at discounts of $1 and $2 to February gasoil, versus $1 yesterday. The low-sulfur grade traded at premiums of $2 and $3, versus $3 and $4 yesterday.

Gasoil for February delivery gained for the fourth day, rising $3.75 to $994.50 a ton as of 5:23 p.m. London time on the ICE exchange. The contract advanced as much as $9.25, or 0.9 percent, to $995.50 yesterday, the highest since Oct. 19. The futures are up 7 percent this month.

The contract’s premium, or backwardation, to March futures widened 25 cents to $10.50 a ton, which was the widest since Oct. 30. The market structure may signal declining near-term supplies or increasing demand.

Gasoil’s crack was little changed at $16.76 as of 4:30 p.m. yesterday. Brent rose 47 cents to $115.37 a barrel.

Residues

High-sulfur fuel oil changed hands from $629 to $630 a ton, the survey of Platts showed. That compares with $621.50 to $622 in the previous session. The low-sulfur grade traded at $660 to $662 a ton, versus $651 to $652 yesterday.

Refinery

Shell halted its 63,000 barrel-a-day Fredericia oil refinery in Denmark after a fault in a furnace yesterday, according to a report from the local newspaper Fredericia Dagblad’s website.

Libya’s 220,000 barrel-a-day Ras Lanuf oil refinery resumed operations after shutting last week, Abdulbari Al-Arusi, the country’s oil minister, said yesterday in Tripoli. A deal has been negotiated with plant workers who had been on strike since Jan. 25, he said.

Libya’s largest refinery shut on Jan. 24 because of technical problems, Abduljalil Mayuf, a spokesman for the state- run Arabian Gulf Oil Co., said on Jan. 28.

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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