Europe Naphtha Rises; Diesel Cargo Premium Falls: Oil Products

European naphtha rose to the highest in almost two weeks as BP Plc and Royal Dutch Shell Plc (RDSA) bought cargoes of the fuel.

Shell sold a cargo of diesel for delivery to London Thames at a lower premium than the previous trade. Gasoil barges traded at the highest in more than two months.

The volume of jet fuel shipped to Europe in January from the Middle East and Asia is poised to decline from the highest level in three months as demand from airlines slows.

Light Products

Vitol Group sold two naphtha cargoes at $929 and $930 a metric ton, according to a Bloomberg survey of traders and brokers monitoring the Platts pricing window. That’s the highest since Jan. 9 and compares with $920 and $921 on Jan. 18. Vitol has offloaded at least 24 cargoes of the fuel this month.

Naphtha’s crack, or discount to Brent, narrowed 20 cents to $6.79 barrel as of 1:23 p.m. London time, according to PVM Oil Associates Ltd., a crude and refined products broker. That’s the least since Jan. 9.

Gasoline in the Amsterdam-Rotterdam-Antwerp oil hub changed hands from $981 to $986 a ton, according to a similar survey of the Argus Bulletin Board and Platts. That’s up from $972 to $976 on Jan. 18, and is the highest since Jan. 10, data compiled by Bloomberg show.

Trafigura Beheer BV and BP Plc (BP/) bought the Eurobob grade, to which ethanol is added to make finished fuel. Total SA (FP) and Chevron Corp. (CVX) also sold barges which typically comprise 1,000 to 2,000 tons. Gunvor bought and sold.

Gasoline’s crack rose to $7.78 a barrel, PVM data showed. That’s the most since Oct. 12 and compares with $7.37 in the previous session.

Middle Distillates

BP bought the 20,000 ton diesel lot from Shell at $15 a ton more than February gasoil, the Platts survey showed. That compares with a Jan. 11 deal at a $20 premium for Amsterdam.

A diesel barge traded at $10 a ton more than February gasoil on the ICE Futures Europe exchange, the survey of Platts showed. That’s the lowest since May 8, according to data compiled by Bloomberg, and is down from deals at $10 to $11 on Jan. 18. Two barges traded at parity to the benchmark prices.

Vitol bought two lots from Argos Groep BV and one from BP.

Heating oil barges traded at a premium of $2 to February gasoil, the highest since Nov. 1, the Platts survey showed. Argos and Litasco sold to Morgan Stanley and Vitol. The low- sulfur grade changed hands at a $6 premium, versus plus $5 on Jan. 18.

Deutsche Lufthansa AG and Statoil ASA (STL) sold barges of jet fuel to Shell and Vitol at $71 and $73 a-ton premiums to February gasoil, the survey of Platts showed. That compares with plus $70 on Jan. 17.

Buyers of jet fuel plan to import about 1.4 million metric tons this month, according to the median estimate from a Bloomberg survey of six traders and brokers who specialize in the aviation fuel. That’s down from 1.5 million in December, which was a three-month high.

About 845,000 tons have so far been loaded or provisionally booked for January, reports from three shipbrokers showed, including Optima Shipbrokers Ltd. in Athens.

Gasoil for February delivery rose $8, or 0.8 percent, to $963.75 ton on ICE as of 5:07 p.m. London time.

The contract’s backwardation, or premium to March, grew $1.25 to $8.25 a ton. This market structure can signal rising near-term consumption or reduced supply.

Money managers’ net-long bets on gasoil increased 9.2 percent to 62,092 in the week to Jan. 15 from 56,871 in the previous period, the data show. That’s a fourth straight weekly gain and is the most since Oct. 30.

Gasoil’s crack widened to $16.72 versus $16.46 on Jan. 18. Brent shrank 0.3 percent to $111.51 a barrel.

Residues

High-sulfur fuel oil changed hands from $612 to $612.50 a ton, the survey of Platts showed. That compares with $609 to $611.25 in the previous session. The low-sulfur grade traded at $639 a ton, versus $635.50 on Jan. 18.

Tenders

Sonatrach, the Algerian state-run oil producer, issued a tender to buy 300,000 tons of gasoline for delivery in February and March, according to two people with knowledge of the matter.

The tender is for the purchase of 10 cargoes at 30,000 tons each, according to the people, who asked not to be identified because the information is confidential. The tender will probably be awarded this week, one of the people said.

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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