ICE Gasoil Gains on Cold; Gunvor Sells Gasoline: Oil Products

Gasoil rose for the fourth time in six sessions on the ICE Futures Europe exchange in London as colder weather spread across the continent.

Money managers increased bullish bets on gasoil to the highest in five weeks, according to data from the ICE exchange. Gunvor Group Ltd. sold barges of European gasoline within the previous session’s trading range.

Light Products

Gasoline barges in the Amsterdam-Rotterdam-Antwerp oil hub traded from $971 a metric ton, according to a survey of traders and brokers monitoring the Argus bulletin Board. That compares with deals from $964 to $979 on Jan. 11.

Cargill Inc. and Trafigura Beheer BV bought the Eurobob grade, to which ethanol is added to make finished fuel. Gunvor sold the barges, which typically comprise 1,000 to 2,000 tons.

Gasoline’s crack, or premium to Brent crude, shrank 24 cents to $6.94 a barrel as of 10:24 a.m. local time, according to data from PVM Oil Associates Ltd., a broker in London. That compares with $7.18 a barrel on Jan. 11 and is the lowest in more than a week.

Naphtha’s crack, or discount to Brent, narrowed to $8.47 a barrel, according to PVM data. It was at $8.73 in the previous session, which was the biggest loss in more than five months.

Middle Distillates

Gasoil for February delivery rose 1.3 percent to $951.75 a ton as of 12:35 p.m. London time on ICE. The contract’s backwardation, or premium to March futures, was $6.50 a ton, compared with $5.25 in the previous session. The market structure can signal rising demand or falling supply.

Temperatures in Frankfurt are forecast to drop to minus 6 degrees Celsius (43 Fahrenheit) on Jan. 19 from minus 1 today. Germany is Europe’s largest heating oil market, according to data from CustomWeather Inc. Freezing temperatures are also predicted for London, Paris and Amsterdam this week, according to weather forecasts compiled by Bloomberg.

Speculative bets that gasoil prices will rise, in futures and options combined, outnumbered short positions by 56,871 contracts in the week to Jan. 8, compared with 52,895 the previous week, ICE data show.

Gasoil’s crack, a measure of refining profit, grew to $16.60 a barrel versus $16.02 at 4:30 p.m. on Jan. 11. Brent rose 0.4 percent to $111.13 a barrel.

To contact the reporter on this story: Lananh Nguyen in London at lnguyen35@bloomberg.net

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

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