Fuel-Oil Discount Shrinks; Glencore Buys Jet Fuel: Oil Products

Asia fuel oil’s discount to crude shrank to the smallest amount in more than two months, signaling reduced losses for refiners turning oil into residual products. Glencore International Plc bought jet-fuel cargoes in Singapore.

Fuel Oil

Fuel oil climbed 82 cents to $4.23 a barrel below Asian benchmark Dubai crude at 2:09 p.m. Singapore time, according to data from PVM Oil Associates Ltd., a broker. That’s the smallest discount since Feb. 14.

BP Plc sold 20,000 metric tons of 180-centistoke fuel oil to Gunvor Group Ltd. for May 9 to May 13 loading, according to a Bloomberg survey of traders who monitored transactions on the Platts window. The cargo traded at $1 a ton over benchmark quotes.

China International United Petroleum & Chemical Co., or Unipec, bought the same volume of 380-centistoke grade from PetroChina Co. for May 4 to May 8, the survey showed. The shipment changed hands at a premium of $2.50 a ton, higher than $2.25 in a similar transaction yesterday.

The premium of 180-centistoke fuel oil to 380-centistoke grade dropped 75 cents to $9.75 a ton, PVM said. This viscosity spread is the narrowest since Feb. 20, meaning bunker, or marine fuel, declined less than higher-quality fuel oil.

Middle Distillates

Glencore purchased two 100,000-barrel cargoes of jet fuel for May 4 to May 8 loading, according to the Bloomberg survey. The Swiss trader bought from Royal Dutch Shell Plc at parity to benchmark quotes and paid 30 cents a barrel over May prices to Morgan Stanley.

Shell bought 150,000 barrels of gasoil, or diesel, with 10 parts-per-million of sulfur from Total SA for May 10 to May 14 loading, the survey showed. Europe’s largest oil company paid $3.10 a barrel above quotes.

Jet fuel’s premium to gasoil was unchanged after falling to 50 cents a barrel at 2:09 p.m. Singapore time, according to PVM. A narrower regrade indicates it is less profitable to make aviation fuel over diesel.

Gasoil’s premium to Dubai crude rose 24 cents to $16.63 a barrel, PVM data showed. This crack spread widened for a fourth day, the longest rising streak since January.

Light Distillates

Japan naphtha’s premium to London-traded Brent crude futures fell to $120.04 a ton at 5 p.m. Singapore time from $127.71 yesterday, according to data compiled by Bloomberg. This crack spread, a measure of the profit from making the gasoline and petrochemical feedstock, declined for a third day.

Vitol Group sold 25,000 tons of open-specification naphtha for second-half June delivery to Total at $1,036 a ton, according to the Bloomberg survey.

ConocoPhillips sold 50,000 barrels of 95-RON gasoline for May 9 to May 13 loading to Shell at $132.80 a barrel, the survey showed. The buyer has purchased at least 300,000 barrels of this grade so far this month.

Refinery News

JX Nippon Oil & Energy Corp. shut the main units at its Marifu refinery yesterday because of an electrical fault, according to two company officials. The halted equipment included the 127,000 barrel-a-day No. 4 crude distillation unit, said the two officials who declined to be identified because of internal policy. The company is investigating the incident.

PetroChina plans to end maintenance at its Dalian refinery on April 29, said an official at the facility, declining to be identified because of internal rules.

China National Petroleum Corp. plans to start preliminary work on a refinery project in the southern Guizhou province, according to a statement on the provincial government website, citing Jiang Jiemin, chairman of the company.

Tenders

Reliance Industries Ltd. and Essar Oil Ltd. sold a total of 145,000 tons of naphtha from India this week for May and June loading, according to four traders who participate in the market.

Indian Oil Corp. offered as much as 40,000 tons of naphtha for May loading from Dahej, said two traders who asked not to be identified because they aren’t authorized to speak to the media.

Idemitsu Kosan Co. bought 35,000 tons of naphtha from Oil & Natural Gas Corp. for May loading from Mumbai, according to two traders who declined to be identified because they aren’t authorized to speak to the media. The Japanese refiner paid a premium of about $43 a ton to Middle East prices.

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