European Diesel Falls to 3-Year Low; Naphtha Gains: Oil Products

Diesel premiums dropped to the lowest in three years in Europe’s barge market.

Naphtha cargoes advanced to the highest level in a month. The premium of February gasoil, or backwardation, to the second month widened to the most in three months on the ICE Futures Europe exchange.

Light Products

Cargoes of naphtha changed hands at $961 a metric ton, the most since Dec. 27, according to a Bloomberg survey of traders and brokers monitoring the Platts pricing window. Glencore International Plc (GLEN) purchased a 12,500 ton shipment, bringing its total to at least 11 since the start of last week, data compiled by Bloomberg show. Trafigura Beheer BV also bought while Vitol Group and BASF SE sold.

Naphtha’s crack, or discount to Brent crude, was unchanged at $7.39 a barrel as of 2:28 p.m. local time, according to PVM Oil Associates Ltd., a London-based broker. That’s the biggest loss in more than a week.

Gasoline in the Amsterdam-Rotterdam-Antwerp oil hub traded from $1,053 to $1,068 a metric ton, according to a survey monitoring the Argus Bulletin Board and Platts. That’s the highest since Oct. 12. The fuel changed hands at $1,037 to $1,056 yesterday.

For at least the sixth session, Total sold Eurobob grade, to which ethanol is added before being sold at the pump. Chevron Corp., Gunvor Group Ltd. and Cargill Inc. were also sellers. Royal Dutch Shell Plc (RDSA), BP Plc (BP/), Morgan Stanley and Vitol Group bought barges, which typically comprise 1,000 and 2,000 tons.

Gasoline’s crack, or premium to Brent, dropped to $12.66 a barrel, PVM data show. It fell to $12.90 yesterday after surging to a four-month high on Jan. 28.

Middle Distillates

Diesel barges traded from $6 to $7 a ton more than February gasoil on the ICE Futures Europe exchange, according to the Platts survey. That matches prices on Jan. 15, 2010. Phillips 66 and Glencore sold to Vitol and Omneo Trading. The product changed hands at plus $10 yesterday.

Heating oil was unchanged on the barge market, with deals at a discount of $1 a ton to February futures, the Platts survey showed. JPMorgan Chase & Co. sold two lots to Vitol. The low- sulfur grade traded at premiums of $3 and $4, versus $6 on Jan. 28. JPMorgan and Glencore were vendors and Vitol bought.

Gasoil for February delivery gained as much as $9.25, or 0.9 percent, to $995.50 a ton on the ICE exchange, the highest since Oct. 19. It was at $990.25 as of 5:13 p.m. London time.

The contract’s premium, or backwardation, to March futures grew 75 cents to $10.50 a ton, the widest since Oct. 30. The market structure may signal declining near-term supplies or increasing demand.

Gasoil’s crack was at $16.81 a barrel as of 4:30 p.m., up from $16.67 yesterday. Brent rose 36 cents to $114.71 a barrel.

Residues

High-sulfur fuel oil changed hands from $621.50 to $622 a ton, the survey of Platts showed. That compares with $617 to $618.50 in the previous session. The low-sulfur grade traded at $651 to $652 a ton, versus $647 to $647.50 yesterday.

Refinery

Total will halt half of the processing capacity at its 230,000 barrel-a-day Donges refinery in France for about five weeks for maintenance that will finish in end-March.

The company will halt some units at Donges from Feb. 4 and others from Feb. 25, it said in an e-mailed statement yesterday. The facilities will progressively resume from end-March, Total said.

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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