European Gasoil Crack Expands for Third Day; Vitol Buys Jet: Oil Products

Europe’s gasoil crack, or premium to Brent crude oil, expanded for a third day as colder-than-usual weather gripped most of Europe. Futures prices rose.

Vitol Group purchased two lots of jet fuel at the highest premium to December gasoil since January this year.

Light Products

Gasoline barges for immediate loading in northwest Europe traded from $833 to $843 a metric ton, according to a Bloomberg survey of traders and brokers monitoring the Argus Bulletin Board and Platts pricing window. That compares with Dec. 3 trades from $826 to $838. The trades are for Eurobob grade to which ethanol is added to make finished motor fuel.

Premium unleaded gasoline traded from $841 to $848 a ton, according to the survey of Platts. The grade climbed to $839 on Dec. 3, the highest price since Oct. 1, 2008.

Brent was little changed at $91.38 a barrel compared with $91.42 on Dec. 3.

Middle Distillates

Vitol purchased 2,000 tons of jet fuel from Morgan Stanley and the same volume from Glencore International AG at a premium of $63 a ton to December ICE gasoil, according to a survey of brokers and traders monitoring the Platts pricing window which ends at 4:30 p.m. in London. That’s the highest premium since Jan. 29 and compares with Dec. 2 trades at a $58 premium.

Gasoil barges traded at discounts of $5.50 to $6.50 a ton to December ICE gasoil, the survey showed. That compares with Dec. 2 deals at discounts of $7.50 and $8.

Gasoil for December delivery increased 0.5 percent to $765.50 a ton on London’s ICE Futures Europe exchange. The fuel for January traded at $770.50 a ton.

Gasoil’s crack widened to $12.27 a barrel from $11.57 on Dec. 3, according to ICE data.

Demand in Germany, Europe’s biggest market for the fuel used in heating, may rise because of freezing weather, said Christophe Barret, a London-based oil analyst at Credit Agricole CIB. “It’s very cold in Germany, they’ll be using a lot of heating oil.”

Temperatures in Munich in southern Germany won’t go above 1 degree Celsius (34 Fahrenheit), according to data on Bloomberg. That’s below the five-year average of 7 degrees Celsius, the data show.

Ultra-low-sulfur diesel barges traded at premiums of $24 to $26 a ton to December ICE gasoil, according to the Platts survey. That compares with Dec. 3 trades at $23 and $24 above the gasoil contract.

Residues

High-sulfur fuel oil’s discount to Brent dropped to $16.20 a barrel, the lowest level since January 2009, amid signs Russia is increasing exports. Russian fuel oil exports from the St. Petersburg oil terminal rose 8.1 percent to 803,000 tons in November from the same month a year ago, according to a port official.

High-sulfur fuel oil barges traded from $476.50 to $479.50 a ton, according to the Platts survey. Low-sulfur fuel oil barges traded at $490 a ton, the survey showed.

High-sulfur fuel oil is used as a shipping fuel and in power generation in some countries.

Refinery News

Motor Oil Hellas SA, the second-largest Greek refiner, plans to halt the older of two crude units at its Corinth plant for maintenance in January.

Work on the 110,000 barrel-a-day unit will last about three weeks, Petros Tzannetakis, Motor Oil’s chief financial officer, said today in a telephone interview from Athens.

Unipetrol AS’s Ceska Rafinerska unit is continuing to supply contracted fuel to customers after a fire at its refinery in Litvinov on Dec. 3 damaged a hydrocracker, a company spokesman said.

To contact the reporters on this story: Rachel Graham at Rgraham13@bloomberg.net Nidaa Bakhsh in London at nbakhsh@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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