Asia Gasoil, Fuel Oil Decline; JPMorgan Buys Fuel: Oil Products

Asia gasoil refining profits headed for their first decline in four weeks, and losses from making fuel oil widened. A trading unit of JPMorgan Chase & Co. bought gasoil in Singapore for the first time in two weeks.

Middle Distillates

JP Morgan Ventures Energy Corp. bought 150,000 barrels of gasoil with 0.5 percent sulfur from Hin Leong Trading Pte at a discount of 25 cents to benchmark prices of the grade, according to a Bloomberg News survey of traders who monitored transactions on the Platts window. The cargo was for loading April 18 to April 22. JP Morgan Ventures previously bought a gasoil cargo on March 8, according to data compiled by Bloomberg.

The gasoil crack, or its premium to Dubai crude, fell 55 cents, or 3.5 percent, to $15.05 a barrel at 6:10 p.m. Singapore time, according to data from PVM Oil Associates Ltd., a broker. This crack spread is at the lowest since March 7 and has fallen 7.7 percent this week, the biggest weekly decline since Feb. 24.

Jet fuel’s premium to gasoil was at 20 cents a barrel, down from 38 cents a week earlier. A narrower regrade indicates it is less profitable to make aviation fuel over diesel.

Fuel Oil

ConocoPhillips sold 20,000 metric tons of 380-centistoke fuel oil for loading April 18 to April 22 to China International United Petroleum & Chemical Co., the survey showed. The Chinese trader, also known as Unipec, paid a premium of $1.50 a ton over benchmark prices of the grade.

Chevron Corp. sold 20,000 tons of 380-centistoke grade loading April 12 to April 16 to Hin Leong at a premium of $2 a ton to average prices published by Platts in April.

Fuel oil’s discount to Dubai crude widened to $6.38 a barrel from $6.17 yesterday. The spread, a measure of losses for refiners turning oil into residual products, has widened 14 percent this week, retracing some of last week’s gains.

The premium of 180-centistoke fuel oil to 380-centistoke grade, or the viscosity spread, was at $11.25 a ton, widening from $11 a week earlier, PVM data showed. This means bunker, or marine fuel, rose less than higher-quality fuel oil.

Light Distillates

Naphtha’s premium to London-traded Brent crude futures rose to $123.19 a ton at 6:17 p.m. Singapore time from $120.26 yesterday, according to data compiled by Bloomberg. This crack spread has gained 13 percent this week.

Vitol bought 50,000 barrels of 92-RON gasoline loading April 7 to April 11 from Gunvor Group Ltd. at $133.60 a barrel.

Refinery News

Cosmo Oil Co. is preparing to start the No. 2 crude-distillation unit at its refinery in Chiba, according to a statement on the company’s website today. Production will resume at the 120,000 barrel-a-day unit after safety approvals by prefectural officials.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE