Asia Naphtha Refining Profit Falls on Crude’s Gain: Oil Products

Profits from making naphtha in Asia dropped after crude surged to the highest price in nine months. Refining losses from fuel oil were at the widest since Feb. 1.

Light Distillates

Japan naphtha swaps for March climbed $9, or 0.9 percent, to $1,040.50 a metric ton at 10:59 a.m. Singapore time, according to data from PVM Oil Associates Ltd., a broker.

The benchmark naphtha’s premium to London-traded Brent crude futures rose to $128.76 a ton from $130.58 on Feb. 17. This crack spread gained 3.3 percent last week, the second consecutive weekly increase.

Naphtha swaps advanced after crude surged to the highest price in nine months as Iran said it was halting oil exports to French and U.K. companies.

Oil for March delivery rose as much as 1.9 percent to $105.21 a barrel in electronic trade on the New York Mercantile Exchange today, the highest intraday price since May 5.

Fuel Oil

Singapore fuel oil’s discount to Dubai crude, a measure of refining losses from the fuel in Asia, widened 58 cents, or 12 percent, to $5.30 a barrel, PVM data showed. The crack spread is at the widest since Dec. 15.

High-sulfur fuel oil swaps for March rose $5.75, or 0.8 percent, to $732.75 a ton, PVM said.

The premium of 180-centistoke (N6SHS180) fuel oil to 380-centistoke (N6SHS380) grade was unchanged at $10 a ton. This viscosity spread has narrowed $1.75 from a week earlier, signaling that prices of marine fuel grades have risen more than power generation grades.

Middle Distillates

Singapore gasoil’s premium to Dubai crude narrowed 5.73 percent last week to $16.93 a barrel, the biggest decline since Nov. 25, PVM data showed.

Gasoil (PVMPSO1M), or diesel, swaps for March rose 90 cents, or 0.7 percent, to $133.50 a barrel on Feb. 17, PVM data showed.

Jet fuel traded at a discount of 40 cents below gasoil on Feb. 17. This discount was at $1.05 on Jan. 31, the widest negative spread in more than three and a half years, signaling it is unprofitable to produce aviation fuel over diesel.

To contact the reporter on this story: Ann Koh in Singapore at akoh15@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

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