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Asia Naphtha Crack Falls; Brightoil Buys Fuel Oil: Oil Products

05 Jan 2012

Asia naphtha’s premium to Brent narrowed, signaling reduced profit from making the light distillate. Brightoil Petroleum Holdings Ltd. bought fuel oil for a second day in Singapore.

Light Distillates

Japan naphtha (NAPHJPNC) swaps were at a premium of $83.80 a metric ton to Brent crude futures at 3 p.m. Singapore time, according to data compiled by Bloomberg. This crack spread, a measure of the profit from making the petrochemical and gasoline feedstock, was at $84.52 at the end of Asian trading yesterday and has narrowed about 8 percent so far this month.

Royal Dutch Shell Plc, the biggest buyer of 95-RON gasoline (MOGFC95S)in Singapore last month, purchased 50,000 barrels from PetroChina Co. at $124.40 a barrel, based on a Bloomberg survey of traders who monitored transactions on the Platts window.

Total SA bought 50,000 barrels of 97-RON grade from Trafigura Beheer BV at a premium of $5.70 a barrel to 92-RON (MOGFC92S)prices, based on the survey. The Paris-based refiner also bought 50,000 barrels of 92-RON from Vitol at a 90-cent premium.

BP Plc sold 50,000 barrels of 92-RON to PetroChina at $121.20 a barrel.

Fuel Oil

Brightoil bought 22,000 tons of 380-centistoke (N6SHS380) fuel oil from PetroChina, paying $14 a ton over benchmark quotes to load between Jan. 31 and Feb. 4, according to the Bloomberg survey. That’s the highest premium since Dec. 7.

Hin Leong Trading Pte purchased 20,000 tons of the same grade from Kuo Oil Ltd. at $9 a ton above first-half January prices, the survey showed. The cargo is for Jan. 20 to Jan. 24, the earliest loading period.

Fuel oil’s discount (PVMPFD1M) to Dubai crude widened 37 cents to $3.04 a barrel at 2:13 p.m. Singapore time, based on data from PVM Oil Associates Ltd., a broker. The gap widened for a third day, signaling refiners’ losses from turning oil into residual products are growing.

The premium of 180-centistoke (N6SHS180) fuel oil to 380-centistoke grade climbed 75 cents to $13.25 a ton, PVM said. This viscosity spread (PVMP13M1) is the widest since Dec. 16, meaning bunker, or marine fuel, advanced less than higher-quality fuel oil.

Middle Distillates

Hin Leong bought 150,000 barrels of gasoil (GASLSICF), or diesel, with 0.5 percent sulfur from BP at 30 cents over benchmark quotes, according to the Bloomberg survey. China International United Petroleum & Chemical Corp., also known as Unipec, purchased 150,000 barrels from Shell at a 60-cent premium.

Gasoil’s premium to Asian marker Dubai crude rose 34 cents to $18.68 a barrel at 2:13 p.m. Singapore time, according to PVM. This crack spread (PVMPGDM1) widened for a third day, the longest rising streak since October.

Jet fuel (JETKSIFC)’s premium to gasoil fell 5 cents to 20 cents a barrel, the lowest so far this week, PVM said. A narrowerregrade (PVMPJG1M) indicates it is less profitable to produce aviation fuelover diesel.