European Gasoline Crack Drops; ICE Gasoil Advances: Oil Products

European gasoline’s crack, or premium to Brent crude, dropped after reaching a four-month high yesterday on news of the planned closure of Hess Corp.’s Port Reading refinery in New Jersey next month.

Gasoil advanced for the seventh session in eight on the ICE Futures Europe exchange in London.

Light Products

Gasoline’s crack, a measure of refining profit, dropped to $12.04 a barrel as of 11:02 a.m. local time, according to PVM Oil Associates Ltd., a London-based broker. The gap surged to $13.45 yesterday, which was the highest since Sept. 28. The crack remains above the five-year average for this time of year.

Prices in the U.S. and Europe rallied after Hess said it will close the 70,000 barrel-a-day facility in New Jersey by the end of February and seek a buyer for its 19 storage terminals located along the U.S. East Coast.

“We would also expect to see this news translating into a positive for European gasoline,” analysts at JBC Energy GmbH, a researcher in Vienna, said in a note today. The U.S. is Europe’s main export market for the fuel.

Gasoline in the Amsterdam-Rotterdam-Antwerp oil hub traded from $1,037 to $1,038 a metric ton, according to a Bloomberg survey of traders and brokers monitoring the Argus Bulletin Board. That compares with deals from $1,020 to $1,048 yesterday, when prices rose to the highest since Oct. 12.

For the fifth day, Gunvor Group Ltd. and Total SA sold the Eurobob grade, to which ethanol is added before being sold at the pump. BP Plc, Trafigura Beheer BV and Cargill Inc. bought barges, which typically comprise 1,000 and 2,000 tons.

Naphtha’s crack, or discount to Brent, widened to $7.61 a barrel, versus $6.75 yesterday, PVM data showed. That’s the biggest loss in more than a week.

Middle Distillates

Gasoil for February delivery rose $3.50, or 0.4 percent, to $974.25 a ton on the ICE exchange as of 12:18 p.m. London time. The contract’s premium, or backwardation, to March futures was unchanged at $8.75 a ton. The market structure may signal declining near-term supplies or increasing demand.

Gasoil’s crack was at $16.25 a barrel, up from $16.03 as of 4:30 p.m. yesterday. Brent fell 12 cents to $113.36 a barrel.

Residues

Fuel oil bookings for cargoes from Western countries arriving in Asia in February rose 6 percent from a week ago to 3.4 million tons, shipping data compiled by Bloomberg show.

At least 19 tankers, including seven very large crude carriers, are scheduled to arrive from Europe, the U.S. and the Caribbean, according to data from shipbrokers including Poten & Partners Inc. and information from traders. That’s up from 3.2 million tons reported last week. Some fixtures are provisional and may be changed or canceled.

Refineries

Cia. Espanola de Petroleos SA, Spain’s second-largest refiner known as Cepsa, halted a hydrocracker and a distillation unit at its 190,000 barrel-a-day Huelva plant for planned maintenance, according to a company official.

The work on the units started over the weekend of Jan. 19 and Jan. 20 and will probably end in the middle of next week, the official said by phone yesterday, asking not to be identified because of company policy. The turnaround reduced the plant’s capacity by 80,000 barrels a day, the official said.

Libya’s largest oil refinery at Ras Lanuf has been closed down since Jan. 24 due to technical issues, including a power failure, Abduljalil Mayuf, a spokesman for the state-run Arabian Gulf Oil Co., said yesterday.

Workers at the 220,000 barrel-a-day plant have been on strike since Jan. 25 to demand better pay, Mayuf said by phone from Benghazi.

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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