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Vitol Extends Naphtha Buying Spree; Diesel Drops: Oil Products

Vitol Group bought three cargoes of European naphtha at higher prices, adding to the 14 shipments it purchased last week. Diesel barge premiums shrank.

Mercuria Energy Trading SA purchased a cargo of European heating oil at a premium to January gasoil on the ICE Futures Europe exchange.

Light Products

Vitol bought consignments of naphtha from Royal Dutch Shell Plc (RDSA) and Gunvor Group Ltd., according to a survey of traders and brokers monitoring the Platts pricing window. The lots traded from $943 to $950 a metric ton, rising from $927 in the previous session. That’s the highest trade in two weeks.

Naphtha’s backwardation, or the premium of front-month swaps to the second month, widened to the most in almost 19 months, according to data from PVM Oil Associates Ltd., a crude and products broker in London.

January naphtha swaps rose 1.1 percent to $925.94 a ton, according to PVM. February swaps were at $905.40, putting the backwardation at $20.54 a ton. That’s the widest spread since May 23, 2011. This market structure usually indicates rising near-term demand or declining supplies.

Naphtha’s crack, or discount to Brent, narrowed to $3.53 a barrel from $4.32 in the previous session, PVM data showed.

Gasoline in the Amsterdam-Rotterdam-Antwerp oil hub traded at least four times at $941 a ton, according to a survey of traders and brokers monitoring the Argus Bulletin Board. That’s up from $933 to $935 on Dec. 14, when prices fell to the least since Nov. 5.

Vitol and Gunvor were buyers of Eurobob grade, to which ethanol is added to make finished fuel. Glencore International Plc (GLEN), Chevron Corp., Hess Corp.’s Hetco unit and BP Plc (BP/) sold barges, which typically comprise 1,000 tons to 2,000 tons.

The fuel’s crack, or premium to Brent crude, rose 9 cents to $4.97 a barrel as of 11:53 a.m. local time, PVM data showed.

Middle Distillates

OAO Lukoil’s Litasco unit sold 15,000 tons of heating oil to Mercuria at a $5 a ton premium to January gasoil on ICE, the survey of Platts showed. The consignment is for delivery to Le Havre, France.

In the barge market, Litasco sold gasoil to Total SA at a discount of $3 to January futures. That’s stable from Dec. 13.

BP sold six of seven diesel barges that traded today, the survey of Platts showed. Statoil ASA was also a seller. Vitol and Total purchased the lots at premiums of $16 and $17 to January gasoil, compared with trades Dec. 14 at $18.

Gasoil for January delivery dropped 25 cents to $922.50 a ton on the ICE exchange as of 5:02 p.m. local time. February futures were 50 cents more expensive than the front month.

Gasoil’s crack rose to $15.80 a barrel at 4:30 p.m. versus $14.70 on Dec. 14. Brent was little changed at $108.19 a barrel.

Refineries

OMV AG, central Europe’s biggest oil company, replaced the heads of its Austrian Schwechat and German Burghausen refineries, the company said.

Dieter Tuppinger, senior vice president at OMV Refining and Marketing GmbH, will be in charge of the 193,000 barrel-a-day Schwechat plant from Jan. 1, OMV said today in an e-mailed statement.

He will replace Gerhard Wagner, who will become the head of the Burghausen refinery, OMV said. The facility can process 72,000 barrels of crude a day, according to data compiled by Bloomberg.

To contact the reporter on this story: Lananh Nguyen in London at lnguyen35@bloomberg.net

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

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