Asia Naphtha Crack Gains; Reliance Sells Gasoil: Oil Products

Spencer Ogden our consultant managing the role
Date posted06/Dec/2011
Spencer Ogden our consultant managing the role

Asia’s naphtha crack spread widened, signaling increased profit for refiners making the petrochemical feedstock. SK Innovation Co., South Korea’s largest refiner, said a power outage shut part of its Ulsan refinery.

Light Distillates

Naphtha’s premium to London-traded Brent crude futures rose to $64.01 a metric ton as of 4 p.m. Singapore time from $58.48 at the end of trading yesterday in Asia, according to data compiled by Bloomberg. This crack spread is a measure of processing profit.

Gunvor Group Ltd. sold 50,000 barrels of 92-RON gasoline to Gracewood International Ltd. in Singapore at $110.80 a barrel, based on a Bloomberg survey of traders who monitored transactions on the Platts window.

SK Innovation said the power outage shut “parts of Operations” at the 840,000 barrel-a-day Ulsan refinery. The electricity loss lasted about 20 minutes and affected“a majority” of the units at the complex, Eom Ik Hoon, a company spokesman at SK Innovation, said by phone from Seoul.

Middle Distillates

Reliance Industries Ltd. sold two 150,000-barrel cargoes ofgasoil, or diesel, with 10 parts-per-million of sulfur in Singapore, according to the Bloomberg survey. The owner of the world’s largest refining complex received $3.50 a barrel over benchmark quotes from Royal Dutch Shell Plc and BP Plc for the cargoes.

Shell sold 150,000 barrels of 0.5 percent sulfur gasoil to Vitol Group, and BP sold a similar cargo to Hin Leong Trading Pte, each at a premium of 60 cents a barrel, the survey showed.

Gasoil’s premium to Asian marker Dubai crude increased 20 cents to $18.05 a barrel at 2 p.m. Singapore time, based on data from PVM Oil Associates Ltd., a broker. This crack spread is the widest in a week.

Jet fuel’s premium to gasoil climbed 5 cents to $1.40 a barrel, PVM data showed. A rising regrade indicates it is more profitable to produce aviation fuel than diesel.

Fuel Oil

Brightoil Petroleum Holdings Ltd. bought two 20,000-ton cargoes of 380-centistoke fuel oil from Koch Industries Inc. in Singapore, according to the Bloomberg survey. The Hong Kong-based trader paid $17.50 a ton over average January quotes. Hin Leong purchased a similar cargo from China International United Petroleum & Chemical Corp., or Unipec, at an $8.50 premium to December prices.

Fuel oil’s discount to Dubai crude narrowed 81 cents to $5.03 a barrel at 2 p.m. Singapore time, based on PVM data. The difference widened $2.94 over the previous four days, signaling losses for refiners turning oil into residual products.

The premium of 180-centistoke fuel oil to 380-centistoke grade fell 25 cents to $13.75 a ton, PVM said. This viscosity spread narrowed for the first time in five days, meaning bunker, or marine fuel, dropped less than higher-quality fuel oil.

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