Shell Buys Jet Fuel; Gasoil Tumbles in London: Oil Products

Royal Dutch Shell Plc bought its second jet fuel cargo in a week in northwest Europe. Gasoil dropped the most in a month on the ICE Futures Europe exchange in London.

Vitol Group purchased a cargo of naphtha, bringing its total for the month to at least 15, according to data compiled by Bloomberg. Tupras Turkiye Petrol Rafinerileri AS issued a tender to buy diesel or gasoil for August delivery.

Light Products

Shell and Saudi Basic Industries Corp. sold 12,500 metric- ton cargoes of naphtha to Vitol and BP Plc (BP/), according to a survey of traders and brokers monitoring the Platts pricing window. The deals were at $839 and $836 a ton and compare with a July 19 deal at $873.

The fuel’s discount to Brent widened to $9.83 a barrel as of 1:53 p.m. local time, according to data from PVM Oil Associates Ltd., a broker in London. That compares with $9.49 in the previous session and is the biggest spread since July 4.

Gasoline barges for immediate loading in Amsterdam- Rotterdam-Antwerp traded from $978 to $986 a ton, according to a similar survey monitoring the Argus Bulletin Board. That compares with as much as $1,020 on July 20, the highest since May 10, according to data compiled by Bloomberg.

OAO Lukoil’s Litasco unit bought the Eurobob grade, to which ethanol is added to make finished fuel, for a fourth day. Gunvor Group Ltd. was the largest buyer of barges, which are typically of 1,000 or 2,000 tons.

Gasoline’s premium to Brent, or crack, rose 50 cents to $13.76 a barrel, PVM data show. That’s the most since June 29.

Middle Distillates

Vitol sold the 30,000-ton cargo of jet fuel for delivery to Rotterdam, the survey of Platts showed. The trade was carried out at a $1 premium to benchmark prices and compares with a deal in the previous session at $73 a ton more than August gasoil on the ICE exchange.

Shell bought a jet fuel shipment on July 18, according to data compiled by Bloomberg.

On the barge market, Morgan Stanley and BP bought lots of the aviation fuel at a $73 premium to August gasoil, the survey showed. That’s unchanged from the end of last week.

Morgan Stanley was the main buyer of diesel on the barge market as about 15,000 tons traded, according to the Platts survey. The fuel changed hands from $26 to $35 a ton more than August gasoil. That compares with deals in the previous session at $29.

Gasoil for August delivery dropped as much as 3.1 percent, or $28, to $891.50 on the ICE exchange, the biggest drop since June 21. The contract was at $895.50 a ton on ICE as of 5:19 p.m. local time.

The September contract was at $895.25, narrowing the front- month’s premium to 25 cents from 75 cents in the previous session.

Hedge funds and other money managers bolstered bullish bets on ICE gasoil futures to 30,252 positions in the week ended July 17, compared with 28,235 contracts last week, ICE data show.

The product’s crack, a measure of refining profitability, fell to $16.55 a barrel at 4:30 p.m. versus $16.78 on July 20. Brent lost 2.9 percent to $103.72 a barrel on ICE.

Residues

High-sulfur fuel oil traded at $590 to $591 a ton, the survey of Platts showed. That compares with $610 to $613 on July 20. The low-sulfur grade changed hands at $631.25 a ton, compared with $658 to $661 in the previous session.

Tender

Tupras is seeking to buy a cargo of ultra-low-sulfur diesel or high-sulfur gasoil for delivery in August, according to a tender document.

The Turkish refiner plans to buy as much as 30,000 metric tons of either gasoil or diesel for delivery to either Izmit or Izmir from Aug. 13 to Aug. 23, according to the document received today by e-mail. The tender closed today and offers are valid until 7:00 p.m. tomorrow.

To contact the reporter on this story: Rupert Rowling in London at rrowling@bloomberg.net

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

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