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Asia Gasoil Crack Shrinks; Glencore Sells Naphtha: Oil Products

Asia’s gasoil crack spread shrank, signaling reduced profits for refiners making diesel. Glencore International Plc (GLEN) sold a naphtha timespread for a third day in Singapore, the region’s largest oil-trading center.

Middle Distillates

Gasoil’s premium to Asian marker Dubai crude dropped 50 cents to $19.18 a barrel at 2:38 p.m. Singapore time, according to data from PVM Oil Associates Ltd., a broker. This crack spread, a measure of processing profit, is the narrowest so far this month.

Trafigura Beheer BV bought 150,000 barrels of gasoil with 0.5 percent sulfur for a second day in Singapore, according to a Bloomberg News survey of traders who monitored transactions on the Platts window. The Amsterdam-based trader paid 10 cents a barrel less than average December prices to Royal Dutch Shell Plc to load from Jan. 11 to Jan. 15.

Jet fuel was unchanged after rising to a premium of 25 cents a barrel to gasoil, PVM said. A positive regrade signals it is more profitable to make aviation fuel over diesel.

BP Plc sold 100,000 barrels of jet fuel to PetroChina Co. for Jan. 3 to Jan. 7 loading, the survey showed. The cargo changed hands at 10 cents a barrel more than prices for Jan. 2 to Jan. 8. Hin Leong Trading Pte sold 245,000 barrels to China Aviation Oil Singapore Corp. for Jan. 6 to Jan. 10 loading at parity to average January prices.

Light Distillates

Glencore sold 25,000 metric tons of open-specification naphtha to Trafigura for second-half February delivery and bought a first-half March shipment, according to the Bloomberg survey. The half-month difference traded at $7.50 a ton. Glencore has sold naphtha timespreads at least 13 times so far this month.

The premium of Japan naphtha to London-traded Brent crude futures fell 34 cents to $116.70 a ton at 5:28 p.m. Singapore time, according to data compiled by Bloomberg. The difference is also known as the crack spread.

PetroChina bought 50,000 barrels of 92-RON gasoline for a second day, paying $115.40 a barrel to Gracewood International Ltd. to load from Jan. 6 to Jan. 10, the survey showed.

Fuel Oil

Fuel oil’s discount to Dubai crude widened 9 cents to $7.39 a barrel at 2:38 p.m. Singapore time, according to PVM. This crack spread widened for a second day, indicating increased losses for refiners making residual products.

The premium of 180-centistoke fuel oil to 380-centistoke grade, or the viscosity spread, was unchanged after advancing to $10.25 a ton, PVM data showed. This means bunker, or marine fuel, moved in tandem with supplies used in power stations.

Refinery News

Essar Oil Ltd. may halt diesel exports from its 400,000 barrel-a-day refinery on India’s west coast by 2016 to meet domestic demand, Chief Executive Officer L.K. Gupta said in an interview in New Delhi.

Tenders

Formosa Petrochemical Corp. closed offers to sell 720,000 barrels of gasoil with 500 parts-per-million of sulfur and 300,000 barrels with 10 parts-per-million for January loading from Mailiao, according to an official who asked not be named because of company policy.

Essar offered to sell as much as 70,000 tons of gasoil with 500 parts-per-million of sulfur for January loading from Vadinar, said two traders who asked not to be identified because the information is confidential.

Oil & Natural Gas Corp. offered to sell 35,000 tons of naphtha for January loading from Hazira, according to a tender document e-mailed to potential buyers.

Korea East-West Power Co. is seeking to buy two fuel oil cargoes of 50,000 tons each for January delivery, according to a tender document sent to potential buyers.

To contact the reporters on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net; Winnie Zhu in Singapore at wzhu4@bloomberg.net

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

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