Asian Fuel Oil Crack Narrows; Shell Sells Gasoil: Oil Products

Asia’s fuel oil crack spread narrowed for the first time this week. Royal Dutch Shell Plc (RDSA) sold gasoil and jet fuel in Singapore, the region’s largest oil- trading center.

Fuel Oil

Fuel oil’s discount to Asian marker Dubai crude narrowed 23 cents to $7.60 a barrel at 3:03 p.m. Singapore time, according to data from PVM Oil Associates Ltd., a broker. This crack spread narrowed for the first time this week.

The premium of 180-centistoke fuel oil to 380-centistoke grade, or the viscosity spread, was unchanged for a third day at $10.25 a metric ton, PVM said. This means bunker, or marine fuel, moved in tandem with supplies used in power stations.

Singapore’s onshore stockpiles of residual fuels, including fuel oil and low-sulfur waxy residue and excluding bitumen, dropped 553,000 barrels, or 2.7 percent, to 20 million barrels in the week to yesterday, according to a unit of the Ministry of Trade and Industry. That’s the lowest level in nine weeks.

Middle Distillates

Shell sold 150,000 barrels of gasoil, or diesel, with 0.5 percent sulfur to Trafigura Beheer BV for Jan. 15 to Jan. 19 loading, according to a Bloomberg News survey of traders who monitored transactions on the Platts window. The cargo changed hands at 90 cents a barrel below average December prices. Amsterdam-based Trafigura has bought at least 15 cargoes of two grades totaling 2.75 million barrels so far this month.

Shell also sold the same quantity of gasoil to Hin Leong Trading Pte for Jan. 4 to Jan. 8, the earliest loading period, the survey showed. Europe’s biggest oil company sold at a discount of $2 a barrel to January prices.

Gasoil’s premium to Dubai crude rebounded $1.24 to $20.22 a barrel at 3:03 p.m. Singapore time, according to PVM. This crack spread, a gauge of processing profit, widened for the first time in five days.

Jet fuel dropped 5 cents to a premium of 5 cents a barrel to gasoil, PVM data showed. This regrade is down for a second day, indicating it is less profitable to make aviation fuel over diesel.

PetroChina Co. bought 100,000 barrels of jet fuel from Shell for Jan. 4 to Jan. 8 loading at a premium of 10 cents a barrel above January prices, according to the survey.

Light Distillates

The premium of Japan naphtha to London-traded Brent crude futures rose $8.22 to $113.76 a ton at 5:32 p.m. Singapore time, according to data compiled by Bloomberg. This crack spread, a measure of the profit from making the petrochemical and gasoline feedstock, widened for the first time in three days.

Glencore International Plc sold 25,000 tons of open- specification naphtha for first-half February delivery to Itochu Corp. and bought a first-half March cargo from the Tokyo-based trader, according to the Bloomberg survey. The March shipment traded at a discount of $14.50 a ton to the February cargo.

Glencore sold a second-half February naphtha cargo to Marubeni Corp. and bought a second-half March shipment, the survey showed. The earlier-delivered parcel traded at a premium of $15.50 a ton to the later cargo. The world’s biggest commodities trader also sold a first-half March cargo to Shell and bought a first-half April shipment. The March cargo transacted at a premium of $16 a ton to the April one.

BP Plc sold 95-RON gasoline to Phillips 66 in Singapore for a second day, according to the survey. The 50,000-barrel cargo will load from Jan. 11 to Jan. 15 and traded at $119.50 a barrel. Arcadia Petroleum sold a similar-sized shipment of 92- RON grade to Total SA loading Jan. 4 to Jan. 8 at $116.80 a barrel.

Tenders

Formosa Petrochemical Corp. sold 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, said an official who asked not to be identified because of company policy. Taiwan’s only publicly traded refiner also bought naphtha for January and offered 380-centistoke fuel oil.

To contact the reporters on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net; Ann Koh in Singapore at akoh15@bloomberg.net; Winnie Zhu in Singapore at wzhu4@bloomberg.net

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

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.