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Europe Gasoline at Year’s-High; BP Sells Diesel: Oil Products

Dec. 2 (Bloomberg) -- European gasoline barge prices rose to their highest levels this year as Royal Dutch Shell Plc bought for a fourth day. The fuel’s crack, or premium to crude, widened to the most in four months.

Gasoil futures traded on London’s ICE Futures Europe exchange gained on increasingly cold temperatures in the region. The crack expanded. BP Plc sold at least four diesel barge lots.

Light Products

Gasoline barges for immediate loading in Amsterdam-Rotterdam-Antwerp traded from $816 to $828 a metric ton, according to a Bloomberg survey of traders and brokers monitoring the Argus Bulletin Board. That compares with deals yesterday from $784 to $808.

Shell bought 4,000 tons of the 13,000 tons that changed hands. Koch Industries Inc. purchased 6,000 tons. Gunvor International Ltd. and Mabanaft BV were the main sellers.

During the Platts pricing window that ends at 4:30 p.m. in London, trades took place from $828 to $831 a ton, according to a separate survey. Total SA was the main buyer, purchasing 4,000 tons out of 9,000 tons. The trades are for Eurobob grade, to which ethanol is added to make finished fuel.

Gasoline’s crack expanded to $7.15 a barrel from $6.45 yesterday, according to data from PVM Oil Associates Ltd., a broker in London. That’s the highest premium since Aug. 2.

Naphtha’s crack widened to $3.15 a barrel from $2.65 yesterday, PVM data show. Naphtha is used in gasoline and petrochemicals production.

Two naphtha cargoes of 12,500-tons each traded at $838 and $842 a ton, according to the survey of Platts.

Middle Distillates

Gasoil barges traded at discounts of $7.50 and $8 a ton to December ICE gasoil, according to the survey of brokers and traders monitoring the Platts window. That compares with deals yesterday at discounts of $8 to $9.

Gasoil for December delivery increased 2.3 percent to $751.25 a ton as of 4:45 p.m. London time on the ICE exchange. The January contract rose 2.3 percent to $757.50 a ton.

Gasoil’s crack, a measure of refining profit, widened to $12.05 a barrel from $10.49 yesterday, according to ICE data. Brent for January rose 0.9 percent to $89.64 a barrel on ICE.

Temperatures in London are expected to drop to minus 4 degrees Celsius (25 Fahrenheit) by Dec. 7 from minus 1 today, according to data by CustomWeather Inc.

Ultra-low-sulfur diesel barges traded at premiums of $22 and $23 a ton to December ICE gasoil, the Platts survey showed. That compares with trades yesterday at premiums of $23 to $25.

Air France-KLM sold two lots of jet fuel on barges to Shell and Vitol Group at a premium of $58 a ton to December ICE gasoil, according to the survey of Platts. That compares with a trade on Nov. 30 at a $59 premium.

Refinery News

OAO Gazprom Neft is considering building a hydrocracker at its refinery in Omsk, enabling its largest oil-processing plant to produce more premium products including diesel and jet fuel.

OAO Lukoil is building a diesel-producing unit at its Burgas refinery in Bulgaria, which will allow it to increase exports of cleaner fuels. The heavy residue hydrocracker will be completed by 2012.

The company also plans to expand capacity of a hydrocracker at the Vlissingen refinery in the Netherlands, in which it holds a 45 percent stake, to 3.8 million tons annually within four years compared with 3.5 million tons currently.

State Oil Co. of Azerbaijan, or Socar as the company is known, plans to build a refinery in Baku by 2020, replacing the company’s two existing plants. The refinery will have an annual capacity of 10 million tons.

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net

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

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