Diesel Rises as Mercuria Buys; ICE Gasoil Declines: Oil Products

European diesel rose as Mercuria Energy Trading SA bought a cargo of the fuel. Vitol Group bought three naphtha lots.

Gasoil dropped on the ICE Futures Europe exchange in London. Front-month futures traded at more than later-dated contracts, keeping the market in backwardation for a second day.

Light Products

Naphtha traded at $947 to $948 a metric ton, according to a Bloomberg survey of traders and brokers monitoring the Platts pricing window. Dow Chemical Co., Trafigura Beheer BV and Glencore International Plc sold. Cargoes of the fuel traded from $952 to $958 yesterday.

Gasoline in the Amsterdam-Rotterdam-Antwerp area traded from $944 to $956 a metric ton, according to a survey of the Argus Bulletin Board. That compares with deals at $955 to $960 yesterday.

Gunvor Group Ltd. bought and sold on the barge market, where lots of 1,000 and 2,000 tons are usually traded. Other sellers of the Eurobob grade, to which ethanol is added to make finished fuel, were Chevron Corp., BP Plc, Total SA and Hess Corp.’s Hetco. Trafigura, Litasco, Vitol, Royal Dutch Shell Plc and Cargill bought.

Middle Distillates

Litasco sold the diesel cargo for delivery to Le Havre at a premium of $26 to January ICE gasoil, the survey showed. That compares with a deal to the same port at plus $25 on Dec. 14.

That’s the fourth time Litasco has sold a consignment of diesel since the start of last week, offloading lots on Dec. 11, Dec. 12 and Dec. 14, data compiled by Bloomberg show.

In the diesel barge market, BP sold 3,000 tons to Phillips 66 at $17 more than January gasoil on ICE, the Platts survey showed. That’s little changed from $16.50 and $17 yesterday.

Vitol and Argos Groep VB sold gasoil to Glencore and Phillips 66 at discounts of $2 to $1 a ton to January futures. That’s compared with discounts of $2 to $4 on Dec. 18.

Gasoil for January delivery fell $9, or 1 percent, to $932.25 a ton as of 17:17 p.m. London time.

The February contract was at a 50 cent discount to the front month, after closing yesterday in backwardation, a structure that signals near-term scarcity of supply or rising demand.

The market had traded in contango, where near-term supplies are cheaper than later-dated deliveries, for most of the previous 28 days.

Gasoil’s crack, or premium to Brent, fell to $16.30 a barrel versus $16.44 as of 4:30 p.m. yesterday. Brent fell $1.45 to $108.75 a barrel on the ICE exchange.

Residues

High-sulfur fuel oil changed hands from $568 to $572.25 a ton, the survey of Platts showed. That compares with $574 to $581 a ton yesterday. The low-sulfur grade traded at $593 to $596, versus $606 yesterday.

To contact the reporter on this story: Konstantin Rozhnov in London at krozhnov@bloomberg.net

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

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