Fuel Oil Margins Fall; Gasoline at Two-Year High: Oil Products

Asian fuel oil’s discount to Dubai crude was at the widest since May amid concern that exports of the fuel to Singapore are rising. Gasoline prices rose to the highest in more than two years.

Light Distillates

Benchmark 92-RON gasoline rose 1.9 percent to $100.95 a barrel, the highest level since Sept. 29, 2008. Asia gasoline’s premium to naphtha, or the reforming margin, rose 40 cents to $8.30 a barrel, the widest since Aug. 6, Bloomberg calculations showed. A widening gap signals naphtha is less valuable to refiners relative to gasoline.

The premium of naphtha for delivery to Japan to Brent crude, or the crack spread, rose to $159.19 a metric ton at 5:49 p.m. Singapore time from $152.62 a ton at the end of Asian trading on Dec. 3, according to data compiled by Bloomberg.

Open-specification naphtha for delivery to Japan gained $13.50 a ton, or 1.6 percent, to $849 a ton, Bloomberg data showed.

Royal Dutch Shell Plc sold 50,000 barrels of 95-RON gasoline loading Dec. 21 to Dec. 25 to Trafigura Beheer BV at $102.90 a barrel, traders said. Arcadia Petroleum Ltd. sold a similar cargo of 95-RON to Vitol Group at $102.80 a barrel. Total SA sold 50,000 barrels of 92-RON loading Dec. 21 to Dec. 25 to Glencore International AG at $101 a barrel.

Middle Distillates

Benchmark gasoil, or diesel, with 0.5 percent sulfur climbed $2.60, or 2.6 percent, to $103.15 a barrel, according to Bloomberg data. That’s the highest level since Oct. 3, 2008. Jet fuel increased $2.40, or 2.4 percent, to $104 a barrel. Both products gained for a third day.

Gasoil’s premium to Dubai crude rose 45 cents to $15 a barrel, according to data from PVM Oil Associates, a brokerage. The crack spread, a measure of refining profit, was at the widest since Jan. 15, 2009.

In Singapore, Asia’s biggest oil-trading center, BP Plc bought a gasoil cargo with 10 parts-per-million of sulfur from Vitol Group at $2.10 a barrel over quotes, traders said. The company also purchased 0.5 percent sulfur grade from Singapore Petroleum Co. as Barclays Plc bought a similar cargo from Shell. Each transaction was at 15 cents a barrel below benchmark quotes, the smallest discount since Nov. 24.

Jet fuel’s premium to gasoil was unchanged after declining to $1.20 a barrel on Dec. 3, according to PVM. This regrade has dropped 25 percent in the past week, indicating aviation fuel is less profitable compared with diesel.

Fuel Oil

Singapore 180-centistoke fuel oil prices rose $3.50, or 0.7 percent, to $516.25 a ton, the highest since Nov. 11, Bloomberg data showed. The price of 380-centistoke fuel oil, mainly used as marine fuel, rose 0.5 percent to $506.50 a ton.

Fuel oil’s discount to Dubai crude, or the crack spread, widened to $8.04 a barrel from $7.86 a barrel on Dec. 3, data compiled by Bloomberg showed. The discount, which is a measure of refining losses from making fuel oil, is at the widest since May 5.

Brightoil Petroleum bought six cargoes in Singapore, traders said. The Hong Kong-listed company bought three cargoes, each containing 20,000 tons of 380-centistoke fuel oil, from Itochu Corp. at a premium of 50 cents to prices published by Platts.

Brightoil bought two cargoes, each containing 33,000 tons of 180-centistoke fuel oil, from PetroChina Co. at 50 cents above Platts prices. Hin Leong Trading Pte sold 20,000 tons of 380-centistoke fuel oil loading Dec. 21 to Dec. 25 to Brightoil at $507 a ton.

Brightoil has bought 13 cargoes, or a total of 280,000 tons, of 380-centistoke fuel oil since Dec. 2, Bloomberg calculations showed.

-- Editor: John Chacko

To contact the reporters on this story: Ann Koh in Singapore at akoh15@bloomberg.net; Yee Kai Pin in Singapore at kyee13@bloomberg.net.

To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net.

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