European Naphtha at Three-Month High; Gasoil Gains: Oil Products

Aug. 21 (Bloomberg) -- European naphtha traded at the highest level in more than three months as Trafigura Beheer BV purchased its 12th shipment since Aug. 6.

Gasoil gained on the ICE Futures Europe exchange in London as Brent advanced. High-sulfur fuel oil also increased.

Light Products

Vitol Group sold the naphtha cargo at $956 a metric ton, according to a survey of brokers and traders monitoring the Platts pricing window. That’s the most since May 3, according to data compiled by Bloomberg. Vitol has sold 26 cargoes this month, data compiled by Bloomberg show.

Naphtha’s discount to Brent widened to $7.61 a barrel as of 2:18 p.m. local time, according to data from PVM Oil Associates Ltd., a broker in London. That compares with $7.26 yesterday.

Gasoline barges for immediate loading in Amsterdam-Rotterdam-Antwerp traded at $1,090 and $1,094 a ton, according to a similar survey of the Argus Bulletin Board. That’s at the lower end of deals yesterday from $1,089 to $1,103.

Trafigura was the main buyer of the Eurobob grade to which ethanol is added to make finished fuel. Barge deals are typically for lots of 1,000 tons or 2,000 tons.

Gasoline’s premium to Brent declined to $13.76 a barrel from $14.30 yesterday, PVM data show.

“In Europe we are watching the water levels on the Rhine which are falling and should accentuate the short-loading of barges and result in some product backing up in the ARA region,” Olivier Jakob, managing director at Petromatrix GmbH, said today in a note.

Middle Distillates

Diesel barges traded at premiums of $29 a ton to September gasoil, the survey of Platts showed. Morgan Stanley was the main buyer. That compares with $28 and $29 yesterday.

Gasoil for delivery in September increased $8.50, or 0.9 percent, to $987.50 a ton on ICE as of 4:54 p.m. London time. The more actively traded October contract was at $988 a ton, putting the market in contango after being at parity for the past three days.

Contango is a structure where later-dated deliveries are more expensive than near-term supplies and may signal near-term supply constraints or an increase in demand.

Gasoil’s crack, a measure of refining profitability, rose to $17.70 a barrel from $17.50 at 4:30 p.m. yesterday. Brent climbed 1.1 percent to $114.90 a barrel.

A gasoil barge changed hands at $4 less than the September futures price, the survey of Platts showed. That’s in line with yesterday.

Residues

High-sulfur fuel oil traded at $651 to $653.25 a ton, the survey of Platts showed. That compares with $641.50 to $644 yesterday.

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