Asia’s Fuel Oil Crack Widens; Shell Sells Gasoil: Oil Products

Asia’s fuel oil crack spread is poised to widen for a third week, signaling increased losses for refiners turning crude into residual fuels. Royal Dutch Shell Plc (RDSA) sold gasoil for a third day in Singapore.

Fuel Oil

Hin Leong Trading Pte bought 20,000 metric tons of 180- centistoke high-sulfur fuel oil from OAO Lukoil for Jan. 17 to Jan. 21 loading, according to a Bloomberg News survey of traders who monitored the Platts window. The transaction was at a discount of $3 a ton to benchmark quotes.

Fuel oil’s discount to Asian marker Dubai crude widened 23 cents to $8.54 a barrel at 2:33 p.m. Singapore time, according to data from PVM Oil Associates Ltd., a broker. The crack spread has widened 2.6 percent so far this week.

The premium of 180-centistoke fuel oil to 380-centistoke grade was unchanged after declining to $9 a ton, PVM data show. This viscosity spread has narrowed 12 percent this week, indicating bunker, or marine fuel, gained more than supplies used in power stations.

Middle Distillates

Shell sold 150,000 barrels of gasoil, or diesel, with 0.5 percent sulfur, to Hin Leong for Jan. 23 to Jan. 27 loading, according to the Bloomberg survey. Europe’s biggest oil company paid the Singapore trader a discount of $2.40 a barrel to January prices.

Gasoil’s premium to Dubai crude dropped 4 cents to $19.77 a barrel at 2:33 p.m. Singapore time, according to PVM. This crack spread, a gauge of processing profit, has shrunk 3.8 percent so far this week.

Jet fuel was unchanged after climbing to a premium of 40 cents a barrel to gasoil, PVM data showed. This regrade has turned positive from a 10-cent discount last week, meaning it is more profitable to make aviation fuel over diesel.

Light Distillates

The premium of Japan naphtha to London-traded Brent crude futures was little changed at $118.91 a ton at 5:21 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, has widen 2.1 percent so far this week. It’s set to advance for a second week.

Shell sold 25,000 tons of open-specification naphtha for second-half February delivery to Itochu Corp. at $965 a ton, according to the Bloomberg survey. Mabanaft GmbH sold an similar cargo to Marubeni Corp. at $964 a ton.

Glencore International Plc sold 25,000 tons of naphtha for first-half March delivery to BP and bought a first-half May cargo from Europe’s second-biggest oil company, the survey showed. The March shipment traded at a premium of $30 a ton to the May cargo.

The Swiss trader also sold 25,000 tons of naphtha for first-half March delivery to Shell and bought a parcel for first-half April, the survey showed. The March shipment traded at a premium of $15.50 a ton to April. Glencore further sold a cargo for second-half February to Marubeni and bought a first- half March shipment. The February cargo traded at a premium of $7 a ton to the March lot.

BP Plc sold 50,000 barrels of 92-RON gasoline, loading Jan. 12 to Jan. 16, to PetroChina Co. at $120.30 a barrel, the survey showed.

Tenders

Mangalore Refinery & Petrochemicals Ltd. offered to sell 245,000 tons of refined oil products for loading from end- January to February from New Mangalore, the company said in documents e-mailed to potential buyers.

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

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

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