Shell Pays Reduced Premium for Asia Gasoil Cargo: Oil Products

Author: Spencer Ogden
Date posted08/Dec/2011
Author: Spencer Ogden

Asia’s naphtha crack fell. Royal Dutch Shell Plc paid a reduced premium for low-sulfur gasoil inSingapore, the region’s largest oil-trading center.

Light Distillates

Naphtha’s premium to London-traded Brent crude futures, a measure of the profit from the petrochemicals and gasoline feedstock, fell to $82.40 a metric ton at 6:25 p.m. Singapore time from $85 at the end of Asian trading yesterday.

Middle Distillates

Shell bought 150,000 barrels of gasoil, or diesel, with 10 parts-per-million of sulfur from Gunvor Group Ltd. in Singapore, according to a Bloomberg survey of traders monitoring transactions on the Platts window. The price was $3.30 a barrel above benchmark quotes, the smallest premium reported for ultra-low-sulfur diesel since Oct. 14.

Shell sold 250,000 barrels of gasoil with 0.5 percent sulfur to Total SA at 50 cents a barrel over quotes, the survey showed. The cargo is for Dec. 23 to Dec. 27, the earliest loading period.

Gasoil’s premium to Asian marker Dubai crude dropped 12 cents to $18.83 a barrel at 3:02 p.m. Singapore time, based on data from PVM Oil Associates Ltd., a broker. Yesterday, thiscrack spread was the widest in two weeks.

Jet fuel’s premium to gasoil fell 15 cents to 95 cents a barrel, PVM data showed. This regrade is the narrowest so far this month, indicating it is less profitable to produce aviation fuel over diesel.

Fuel Oil

PetroChina Co. bought 20,000 tons of 180-centistoke fuel oil from China International United Petroleum & Chemical Corp. in Singapore, paying $13 a ton over benchmark quotes, according to the Bloomberg survey. The cargo will load between Dec. 23 and Dec. 27. PetroChina sold a similar cargo for Jan. 3 to Jan. 7 loading to Hin Leong Trading Pte at a $5 premium to December prices, the survey showed.

Fuel oil’s discount to Dubai crude narrowed 18 cents to $5.82 a barrel at 3:02 p.m. Singapore time, based on PVM data. Yesterday, the gap was the biggest since Sept. 15, signaling losses for refiners turning oil into residual products.

The premium of 180-centistoke fuel oil to 380-centistokegrade, or the viscosity spread, was unchanged after rising to $14.25 a ton, PVM said. This means bunker, or marine fuel, moved in tandem with higher-quality fuel oil.