Asia Gasoil Falls; Fuel Oil Viscosity Spread Gains: Oil Products

Author: Spencer Ogden
Date posted08/Feb/2012
Author: Spencer Ogden

Asia gasoil refining profits fell for the first time in three days. The viscosity spread, or 180-centistoke fuel oil’s premium to the 380-centistoke grade, was at the widest in almost a week.

Middle Distillates

The premium of gasoil, or diesel, to Dubai crude fell 17 cents, or 0.9 percent, to $18.51 a barrel at 10:22 a.m. Singapore time, according to PVM Oil Associates Ltd., a broker. This crack spread was at $18.93 a barrel on Jan. 30, the widest in two weeks.

March gasoil swaps decreased 5 cents to $131.75 a barrel, PVM said. Jet fuel was at a discount of 65 cents to gasoil, unchanged from yesterday. This regrade has been negative since Jan. 16, signaling it is unprofitable to make aviation fuel over diesel.

Fuel Oil

High-sulfur fuel oil swaps for March declined 75 cents, or 0.1 percent, to $711.25 a metric ton, based on PVM data.

Fuel oil’s discount to Dubai crude widened 24 cents, or 6.6 percent, to $3.82 a barrel, PVM data showed. The fuel was at a premium of 91 cents to the oil on Jan. 27, the biggest refining profit from making the fuel since Bloomberg started tracking the data in August 2006.

The premium of 180-centistoke fuel oil to 380-centistoke grade gained 25 cents to $9.75 a ton. This viscosity spread is at the widest since Feb. 2, signaling that prices of power-generation fuel are outpacing the lower quality marine fuel grade.

Light Distillates

Naphtha’s premium to London-traded Brent crude futures dropped to $114.85 a ton at 11 a.m. Singapore time from $118.32 yesterday, according to data compiled by Bloomberg. This crack spread, a measure of refining profit, fell 25 percent last week, the biggest weekly decline since Nov. 11.

Benchmark Japan naphtha swaps fell $4.75, or 0.5 percent, to $989.25 a ton, according to PVM data.