European Gasoline Crack Advances to 32-Month High: Oil Products

European gasoline’s crack spread, or premium to Brent crude, advanced to the most in more than 2 1/2 years on speculation that refiners will increase exports to the U.S. because of flooding on the Mississippi River.

Gasoline for immediate delivery rose as Total SA (FP), Europe’s biggest refiner, bought on the barge market. Gasoil advanced on London’s ICE Futures Europe exchange.

Light Products

The front-month gasoline crack widened for a fifth day to $15.84 a barrel, according to PVM Oil Associates Ltd. data on Bloomberg. That’s the most since September 2008.

Flooding on the Mississippi threatened refineries and shipping. As many as 11 plants, accounting for 13 percent of U.S. fuel output, are located between New Orleans and Baton Rouge, according to Lipow Oil Associates LLC in Houston.

“There are places where barges can no longer operate and there is a chance that refineries will be affected,” said Christophe Barret, an oil analyst at Credit Agricole CIB.

Gasoline stockpiles on the U.S. East Coast dropped 24 percent since the beginning of March, according to data from the Energy Department in Washington. “With the current levels of inventories there are concerns about supply,” Barret said.

So-called barge lots of gasoline traded at as much as $1,139 a metric ton, according to a Bloomberg survey of traders and brokers monitoring the Argus Bulletin Board and the Platts pricing window. That’s more than yesterday’s highest price of $1,101 for the Eurobob grade, to which ethanol is added to make finished vehicle fuel. Petroplus Holdings AG was among today’s sellers on the barge market, where lots are usually about 1,000 or 2,000 tons.

Middle Distillates

Gasoil, used mainly in heating, advanced for the first time in six days. Gasoil for May delivery added $20.25, or 2.2 percent, to $940 a ton on London’s ICE Futures Europe exchange as of 5:03 p.m. local time. That contract expires on May 12.

Heating oil barges traded at discounts of $3 a ton to the May ICE gasoil contract, little changed from yesterday.

Jet fuel traded at premiums of $87 and $88 to the June ICE gasoil contract, the survey showed. Jet barges traded from $84 to $88 more than the May gasoil contract yesterday.

Residues

Low-sulfur fuel oil traded from $648.50 to $660 a ton in northwest Europe, the survey showed. High sulfur fuel oil barges traded from $620 to $625 a ton.

Fuel oil is used to power ships and generate electricity. Low sulfur fuel oil contains 1 percent sulfur, while its more- polluting equivalent has a 3.5 percent threshold.

Refineries

Paris-based Total halted a crude unit at its Gonfreville refinery in France yesterday after a fire. The crude-processing unit has been stopped and “there is no other impact on the refinery,” Michael Crochet-Vourey, a spokesman for the company, said in an e-mailed statement.

The fire, which generated smoke visible outside the refinery, started at a distillation unit called D5 and was brought under control within 20 minutes, according to the statement.

ConocoPhillips reached an agreement to cuts the workforce at the Wilhelmshaven refinery in northern Germany, a labor representative said. The refinery will be converted into an oil storage facility from June 1, Vera Ackermann, district manager for the IG BCE union, said today.

“By the end of this month, we will begin serving notices to employees who will not be required to operate the terminal operations at the site,” Rich Johnson, a ConocoPhillips spokesman based in Houston, said in an e-mail. “We have no plans to dismantle Wilhelmshaven.”

To contact the reporter on this story: Rachel Graham in London rgraham13@bloomberg.net

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

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