Asia Naphtha Climbs to Two-Year High; Gasoil Rises: Oil Products

Asia refining margins for naphtha rose after prices of the chemical feedstock soared to the highest level in more than two years on demand from China. Singapore gasoil rose by the most in five weeks.

Light Distillates

The premium of naphtha for delivery to Japan to Brent crude, or the crack spread, rose to $164.09 a metric ton at 5:38 p.m. Singapore time from $158.10 a ton at the end of Asian trading yesterday, according to data compiled by Bloomberg. The gap is the widest since Nov. 29.

Open-specification naphtha for delivery to Japan rose $24, or 3 percent, to $836.50 a ton, the highest since Sept. 24, 2008, Bloomberg data showed. Benchmark 92-RON gasoline climbed for the seventh day, gaining 3.2 percent to $97.15 a barrel.

Asia gasoline’s premium to naphtha, or the reforming margin, rose to $5.80 a barrel from $5.50 yesterday, Bloomberg calculations showed. A widening gap signals naphtha is less valuable to refiners relative to gasoline.

Morgan Stanley bought 50,000 barrels of 92-RON gasoline loading Dec. 28 to Jan. 1 from Arcadia Petroleum Ltd. at $97.10 a barrel, traders said. Cargill Inc. bought 25,000 tons of naphtha for first-half February delivery from Glencore International AG at $834 a ton.

Middle Distillates

Singapore prices of gasoil with 0.5 percent sulfur rose 2.5 percent, the most since Oct. 25, to $99.05 a barrel, according to Bloomberg data. Jet fuel increased 2.5 percent to $100.55 a barrel. Dubai crude oil rose 2.2 percent to $86.08 a barrel.

Gasoil’s premium to Dubai crude, or the crack spread, increased to $12.97 a barrel today from $12.44 a barrel yesterday. Jet fuel’s premium to gasoil, also known as the regrade, was unchanged for the third day at $1.50 a barrel, Bloomberg data showed.

Iraq’s State Oil Marketing Organization plans to buy about 2,600 metric tons of gasoil a day under a three-month renewable contract, according to tenders obtained today from SOMO. Submissions will start Dec. 5 and end at noon Baghdad time on Dec. 20.

Glencore bought 150,000 barrels of 0.5 percent sulfur gasoil loading Dec. 17 to Dec. 21 from Vitol Group at a discount of 35 cents to Platts assessments, said traders.

Hin Leong Trading Pte bought 100,000 barrels of jet fuel from BP Plc at a discount of 40 cents to the assessments for loading Dec. 17 to Dec. 20.

Fuel Oil

Singapore 180-centistoke fuel oil, the benchmark grade in Asia, gained 1.7 percent to $509.50 a ton. The price of 380-centistoke fuel oil, mainly used as marine fuel, rose 1.9 percent to $502 a ton, the first time in three weeks it has climbed above $500 a ton, a level at which some ship owners reduce fuel purchases.

Fuel oil’s discount to Dubai crude, or the crack spread, widened to $7.09 a barrel from $6.54 a barrel yesterday. December fuel oil swaps’ premium to January swaps, known as the timespread, rose to $2 a ton from $1 a ton yesterday, Bloomberg data showed.

Singapore’s inventories of residues, a category that includes fuel oil, decreased 11 percent to 20.4 million barrels in the seven days ended Dec. 1 from a week earlier, the trade ministry said today.

Hin Leong bought 20,000 tons of 180-centistoke fuel oil from Vitol for Dec. 18 to Dec. 22 loading at a premium of $1 a ton over fuel oil assessments, said traders.

PetroChina Co. sold three, 20,000-ton cargoes of 380-centistoke fuel oil. The company sold one lot to Royal Dutch Shell Plc loading Dec. 17 to Dec. 21 at $1 above Platts fuel oil prices. The other two cargoes, loading Dec. 22 to Dec. 26 and Dec. 28 to Jan. 1, were sold to Brightoil Petroleum Group at $1.50 a ton above Platts prices.

Refinery News

China Petroleum & Chemical Corp. shut the No. 1 ethylene unit at its Maoming plant in southern China for maintenance yesterday, said Cai Zhan, the plant spokesman. The unit will be closed for about one month.

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