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Fuel-Oil Discount Shrinks; Shell Sells Gasoline: Oil Products

22 Nov 2011

Asia fuel oil’s discount to crude narrowed for the first time in four days. Royal Dutch Shell Plc sold its fourth gasoline cargo this month in Singapore, the region’s largest oil-trading center.

Light Distillates

Naphtha’s premium to London-traded Brent crude futures rose to $58.20 a metric ton at 5:45 p.m. Singapore time from $47.50 at the end of Asian trading yesterday, according to data compiled by Bloomberg. This crack spread is a measure of the profit from making naphtha, used as a feedstock for petrochemicals and gasoline.

Shell sold 50,000 barrels of 97-RON gasoline to PetroChina Co. at $110.50 a barrel, according to a Bloomberg survey of traders who monitored transactions on the Platts window. That’s the fourth time Europe’s biggest oil company has sold the motor fuel this month in Singapore.

BP Plc sold 50,000 barrels of 92-RON gasoline to Morgan Stanley at $107 a barrel, the survey showed.

Middle Distillates

Trafigura Beheer BV bought two cargoes of gasoil, or diesel, with 0.5 percent sulfur, bringing its purchases this month to at least 23 cargoes totaling 3.65 million barrels, according to the Bloomberg survey. The Amsterdam-based trader paid 90 cents a barrel over benchmark quotes to Chevron Corp. and a $1.10 premium to Brightoil Petroleum Holdings Ltd.

Shell sold 150,000 barrels of 0.5 percent sulfur gasoil to PetroChina at a $1.10 a barrel above quotes, the survey showed. Reliance Industries Ltd. sold a similar-sized cargo with 10 parts-per-million of sulfur to BP, receiving a premium of $3.80. That’s the smallest spread for ultra-low-sulfur diesel since Oct. 25.

Gasoil’s premium to Asian marker Dubai crude fell $1.16 to $18.71 a barrel at 2 p.m. Singapore time, based on data from PVM Oil Associates Ltd., a broker. This crack spread is the narrowest since Nov. 10.

Jet fuel’s premium to gasoil rose 10 cents to $1.80 a barrel, PVM data showed. This regrade widened for a fifth day, the longest rising streak since July, indicating it is more profitable to produce aviation fuel over diesel.

Fuel Oil

Petroleo Brasileiro SA, or Petrobras, bought 20,000 tons of180-centistoke fuel oil in Singapore from Shell at $13 a ton over benchmark quotes, according to the Bloomberg survey. The cargo is for loading from Dec. 16 to Dec. 20.

Fuel oil’s discount to Dubai crude narrowed 17 cents to $5.22 a barrel at 2 p.m. Singapore time, based on PVM data. The difference narrowed for the first day in four, signaling reduced 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 decreasing to $11.75 a ton, PVM said. This means bunker, or marine fuel, moved in tandem with higher-quality fuel oil.

To contact the reporters on this story: Yee Kai Pin in Singapore at; Ann Koh in Singapore at