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European Diesel at One-Year High; Naphtha Falls: Oil Products

Nov. 5 (Bloomberg) -- European diesel barges rose to trade at the highest premium to front-month gasoil on the ICE Futures Europe exchange in more than a year. Heating oil declined.

Naphtha cargoes dropped for a second session as Trafigura Beheer BV sold for another day.

Light Products

Naphtha fell to trade from $922 to $925 a ton, according to a survey of traders and brokers monitoring the Platts pricing window. That’s down from $933 to $936 on Nov. 2. Trafigura, Koch Industries Inc., BP Plc and Statoil ASA sold. Vitol Group, Royal Dutch Shell Plc and Dow Chemical Co. bought.

The product’s crack, or discount to Brent crude, widened 17 cents to $3.98 a barrel, as of 1:53 p.m. local time, according to data from PVM Oil Associates Ltd., a crude and products broker in London.

Barges of gasoline for loading in the Amsterdam-Rotterdam-Antwerp hub traded from $918 to $923 a metric ton, according to a Bloomberg survey of traders and brokers monitoring the Argus Bulletin Board and Platts. That’s the lowest since June 28 and compares with Nov. 2 trades from $930 to $944.

Shell and Trafigura bought the Eurobob grade, to which ethanol is added to make finished fuel. Glencore International Plc and Gunvor Group Ltd. sold barges, which usually comprise 1,000 to 2,000 tons.

The fuel’s crack, or premium to Brent crude, rose to $3.69 a barrel, the PVM data showed. That’s up from $3.32 the previous session.

Middle Distillates

Ultra-low-sulfur diesel barges changed hands at a $59 a-ton premium to November gasoil, according to the survey of Platts. That’s up from trades at $53 to $54 on Nov. 2 and is the highest since Oct. 21, 2011 when it was $64, according to data compiled by Bloomberg. Shell sold twice to Vitol.

Total SA bought two cargoes of the fuel. The first was sold by Repsol YPF for delivery to the French Mediterranean port of La Nouvelle at a premium of $27 a ton. The second shipment was for delivery to Amsterdam, with Preem AB selling at plus $55 a ton. That compares with trades to the Netherlands at $37 and $47 on Oct. 31.

Heating oil barges dropped, changing hands at $3 a ton less than November gasoil futures, the survey showed. Vitol was the only seller. The product traded in the previous session from a discount of $2 to parity with the futures. The low-sulfur grade was sold at premiums of $49 to $51, versus $51 on Nov. 2.

Vitol bought a cargo of jet fuel from Shell at $2 more than benchmark prices.

Hedge funds and other money managers reduced bullish bets on gasoil to the least in 10 weeks, according to data from the ICE in London.

Speculative bets that gasoil prices will rise, in futures and options combined, outnumbered short positions by 73,197 contracts in the week ended Oct. 30, the ICE said today in its weekly Commitment of Traders report. That’s down 2,543 lots and is the lowest since Aug. 21.

Gasoil for November delivery rose $1.75, or 0.2 percent, to $926.75 a ton on ICE as of 5:09 p.m. London time. The December contract’s discount to the front month, or backwardation, widened 50 cents to to $2.50.

Gasoil’s crack decreased to $17.79 a barrel at 4:30 p.m. compared with $17.92 on Nov. 2. Brent advanced 0.7 percent to $106.41 a barrel.

Residues

High-sulfur fuel oil traded from $568 to $569.50 a ton, the Platts survey showed. That compares with $575 to $579 in the previous session. The low-sulfur grade traded at $602 a ton, versus Nov. 2 deals at $608.

Refineries

Exxon Mobil Corp. is restarting all units at its 122,000 barrel-a-day Slagentangen refinery outside Oslo, company spokesman Eirik Hauge said. That follows planned maintenance that commenced in September, he said.

Libya’s Az Zawiya refinery halted processing after protesters stopped fuel trucks from loading at the 120,000 barrel-a-day plant near the capital Tripoli, state- run Libya TV reported.

The refinery, run by the government-owned National Oil Corp., suspended fuel deliveries on Nov. 3, according to the broadcast, which didn’t give an estimated date for operations to resume. The protesters are mostly injured veterans of the uprising against former leader Muammar Qaddafi and are seeking compensation and medical treatment from the government.

To contact the reporter on this story: Lananh Nguyen in London at lnguyen35@bloomberg.net

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

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