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Shell Buys Europe Jet Fuel Cargo; BP Sells Diesel: Oil Products

Nov. 21 (Bloomberg) -- Royal Dutch Shell Plc purchased a jet fuel cargo in northwest Europe at prices in line with a deal done 10 days ago, the last trade in the market. BP Plc sold a diesel consignment.

Gasoil on London’s ICE Futures Europe exchange declined for a second day as crude decreased. Gasoline fell to the lowest in nine months. The fuel’s crack narrowed.

Light Products

Gasoline barges for immediate loading in Amsterdam-Rotterdam-Antwerp traded at $884 and $886 a metric ton, according to a survey of traders and brokers monitoring the Argus Bulletin Board. That compares with Nov. 18 deals from $894 to $901 and is the lowest level since Feb. 18.

Shell bought 5,000 of the 7,000 tons that changed hands. Sellers included BP and Chevron Corp. The trades are for Eurobob grade to which ethanol is added to make finished fuel and are typically for lots of 1,000 or 2,000 tons.

Gasoline’s discount to Brent narrowed to $1.36 a barrel from $3 on Nov. 18, according to PVM Oil Associates Ltd., a crude and products broker in London.

Naphtha’s discount to Brent shrank to $12.47 a barrel from $13.22 on Nov. 18, PVM said.

Middle Distillates

Shell bought from Eminent Energy Ltd. about 30,000 tons of jet fuel, partly priced at a premium of $77 a ton to December gasoil, according to a survey of traders and brokers monitoring the Platts pricing window which ends at 4:30 p.m. London time. That’s in line with a deal on Nov. 11.

BP sold a 10,000-ton diesel cargo to Greenergy International Ltd. at a discount of $1.50 a ton to the average of Platts prices, for delivery to the U.K., according to the survey. Litasco, OAO Lukoil’s trading arm, purchased 18,000 tons from Eminent Energy at a discount of $1 to the top end of Platts assessments for delivery to Dunkirk in France.

Diesel barges traded at premiums of $19 to $26 a ton to December gasoil, the survey showed. That compares with Nov. 18 trades at $27 to $29.

Gasoil barges traded at premiums of $5 to $10 a ton to December gasoil, it showed. That compares with Nov. 17 trades at $8 to $12 more than the futures contract.

Gasoil for December dropped 2.6 percent to $947.75 a ton as of 5:09 p.m. London time on the ICE exchange. That’s the lowest price since Nov. 1. The contract for December decreased for a sixth day, falling 2.6 percent to $939 a ton.

The backwardation between the two months narrowed to $8.75 a barrel from $9.25 at settlement on Nov. 18, ICE data show. A market is in backwardation when near-term supplies cost more than later-dated delivery and signals a supply crunch or increase in demand.

The fuel’s crack, a measure of refining profitability, shrank to $20 a barrel from $20.94 at 4:30 p.m. on Nov. 18, according to ICE data. Front-month Brent fell 1.2 percent to $106.28 a barrel on the ICE exchange.

Net-long managed-money bets on ICE gasoil futures and options fell to 55,632 contracts last week, according to ICE data. That’s down 2,016 lots from 57,648 the previous week.

Residues

High-sulfur fuel oil traded at $602 to $603 a ton, according to the survey of Platts. That compares with Nov. 18 trades from $615 to $620.

Refineries

Repsol YPF SA said a strike at its Petronor oil refinery in Bilbao, Spain, will end on Nov. 23. Production units were halted as a result of the protest, the Madrid-based company said today in an e-mailed statement.

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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