Asia Gasoil Crack Gains; Arcadia Buys Gasoline: Oil Products

Asia’s gasoil crack spread capped a third annual gain, signaling increased profit for refiners making diesel. Arcadia Petroleum Ltd. bought gasoline cargoes in Singapore, the region’s largest oil-trading center.

Middle Distillates

Gasoil’s premium to Asian marker Dubai crude was at $18.86 a barrel at 2:04 p.m. Singapore time, according to data from PVM Oil Associates Ltd., a broker. This crack spread, a gauge of processing profit, has widened 8.9 percent in 2012, its third annual increase.

BP Plc bought 150,000 barrels of gasoil with sulfur content of 10 parts per million from Chevron Corp. for Jan. 15 to Jan. 19, the earliest loading period, according to a Bloomberg News survey of traders who monitor the Platts window. The cargo changed hands at a premium of 90 cents a barrel to average January prices. That’s the first reported transaction for ultra-low-sulfur diesel since Oct. 16.

BP also purchased a similar quantity of gasoil with 0.5 percent sulfur from Royal Dutch Shell Plc at a discount of $2.50 a barrel to January prices, the survey showed. The shipment is for Jan. 26 to Jan. 30 loading.

Jet fuel rose 5 cents to a premium of 50 cents a barrel to gasoil, PVM said. This regrade has rebounded from a 20-cent discount at the end of 2011, showing it is more profitable to make aviation fuel over diesel.

Light Distillates

The premium of Japan naphtha to London-traded Brent crude futures was at $110.90 a metric ton at 2:14 p.m. Singapore time, according to data compiled by Bloomberg. This crack spread, a measure of the profit from making the petrochemical and gasoline feedstock, widened 15 percent this year.

Glencore International Plc sold 25,000 tons of open-specification naphtha for second-half February delivery to Shell at $952 a ton, according to the Bloomberg survey. The world’s biggest commodities trader also sold the same quantity for first-half March to Vitol Group at $946 a ton. Mabanaft GmbH sold a similar March cargo to BP at $947 a ton.

Arcadia bought three 50,000-barrel cargoes of 95-RON gasoline loading Jan. 15 to Jan. 19, the survey showed. PetroChina Co. sold one shipment at $122.70 a barrel and a second parcel at $122.80 a barrel. BP was the seller of the third cargo for $122.70 a barrel.

PetroChina bought two 50,000-barrel cargoes of 92-RON grade, the survey showed. China’s biggest oil company paid $120.40 a barrel to Arcadia for Jan. 15 to Jan. 19 loading and $120.20 a barrel to Gunvor Group Ltd. for Jan. 18 to Jan. 22.

Fuel Oil

OAO Lukoil sold 40,000 tons of 380-centistoke high-sulfur fuel oil to a unit of SK Innovation Co. at a discount of $1 a ton to average January prices, according to the Bloomberg survey. The cargo is for Jan. 18 to Jan. 22 loading.

Fuel oil’s discount to Dubai crude widened 42 cents to $9.18 a barrel at 2:04 p.m. Singapore time, according to PVM. This crack spread has increased from a $1.55 discount at the end of 2011, indicating increased losses for refiners producing residual fuels.

The premium of 180-centistoke fuel oil to 380-centistoke grade was unchanged after falling to $8.75 a ton, PVM data showed. The viscosity spread has narrowed 19 percent this year, meaning bunker, or marine fuel, declined less than supplies used in power stations.

Refinery News

Exxon Mobil Corp. is in the process of starting an ethylene facility at its expanded petrochemical plant in Singapore, according to an e-mailed statement on Dec. 29. Production at the steam cracker is expected to begin “in the next few months,” the company said.

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