European Heating Oil Gains; BP Sells Jet Cargoes: Oil Products

European heating oil barges traded at the highest differential in almost a month as Omneo Trading bought amid forecasts for freezing weather.

BP Plc (BP/) sold two jet fuel cargoes and two diesel barges. Gasoil advanced to the highest in five weeks on the ICE Futures Europe exchange in London.

Light Products

Gasoline barges traded from $979 to $981 a metric ton in the Amsterdam-Rotterdam-Antwerp area, according to a Bloomberg survey of traders and brokers monitoring the Argus Bulletin Board. That compares with deals at $978 and $983 yesterday.

Chevron Corp. (CVX), Total SA (FP) and Statoil ASA (STL) sold the Eurobob grade, to which ethanol is added to make finished fuel. Trafigura Beheer BV and Gunvor Group Ltd. each bought three barges, which typically comprise 1,000 to 2,000 tons.

Gasoline’s crack, or premium to Brent crude, narrowed to $7.11 a barrel as of 1:59 p.m. local time, according to data from PVM Oil Associates Ltd., a broker in London. It was $7.27 yesterday, the highest since Oct. 12.

Naphtha’s crack, or discount to Brent, was at $5.73 a barrel, from $5.90 the previous session, according to PVM data.

Middle Distillates

Morgan Stanley and Vitol Group bought a cargo of jet fuel each from BP at $1 a ton premium and parity to the northwest Europe benchmark price, the survey of Platts showed. A lot was sold Jan. 4 at a premium of $78 a ton to February gasoil.

Gunvor sold a diesel cargo of as much as 30,000 tons to Noble Group Ltd. at parity to the Mediterranean benchmark price, the Platts survey showed. The lot was for delivery to the southern French port of Lavera and compares with a trade on Dec. 31 at plus $3.

Diesel barges traded from $20.50 to $21.50 a ton more than February gasoil versus plus $23 to the January contract in the previous session, the survey of Platts showed. Trafigura and Vitol bought and Royal Dutch Shell Plc (RDSA) sold.

Heating oil barges traded at parity to January gasoil. That compares with deals at a $1 discount yesterday and is the most since Dec. 11. Vitol sold the product.

Gasoil for January delivery, which expires tomorrow, rose $1.75, or 0.2 percent, to $947 a ton as of 5:35 p.m. London time on the ICE exchange. It was as high as $952.25, the most since Dec. 3.

The contract was at parity to February after ending five sessions in contango, a structure that can signal falling demand or rising supply.

Gasoil’s crack advanced to $15.79 a barrel versus $15.11 in the previous session. Brent lost 0.5 percent to $111.35 a barrel on ICE.

Low temperatures in Frankfurt are forecast to drop to minus 9 degrees Celsius (16 Fahrenheit) on Jan. 15, from 4 degrees today, according to CustomWeather Inc. data on Bloomberg.

“Starting in the middle of next week it is expected that some serious cold will return to continental Europe,” Olivier Jakob, managing director at consultants Petromatrix GmbH in Zug, Switzerland, said in a note today.

Residues

High-sulfur fuel oil changed hands from $610 to $611 a ton, the survey of Platts showed. That compares with $605 to $606.50 yesterday. The low-sulfur grade traded at $640.

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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