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Naphtha Drops to 5-Month Low; Europe Diesel Falls: Oil Products

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Jan. 11 (Bloomberg) -- European naphtha fell to a five-month low as Vitol Group sold on the cargo market. Diesel barges declined as BP Plc and Argos Groep BV sold.

Gasoil for February delivery fell for the first time in five days on the ICE Futures Europe exchange as Brent dropped.

Light Products

BP bought a naphtha cargo at $888 a metric ton, the lowest since Aug. 3, according to a Bloomberg survey of traders and brokers monitoring the Platts pricing window. That compares to trades from $922 to $930 yesterday. Vitol has sold 12 lots this year, according to data compiled by Bloomberg.

Naphtha’s crack, or discount to Brent, widened to $7.98 a barrel as of 1:55 p.m. local time, the most since Aug. 7, according to data from PVM Oil Associates Ltd., a broker in London.

Gasoline barges in the Amsterdam-Rotterdam-Antwerp oil hub traded from $964 to $979 a ton, according to a similar survey of traders and brokers monitoring the Argus bulletin Board and Platts. Deals were done at $987 to $994.50 a ton yesterday, the highest since Oct. 19.

BP Plc, Gunvor Group Ltd., Cargill Inc., Royal Dutch Shell Plc and Trafigura Beheer BV bought the Eurobob grade, to which ethanol is added to make finished fuel. Total SA, Trafigura and Gunvor sold the barges which typically comprise 1,000 to 2,000 tons.

Gasoline’s crack, or premium to Brent, widened 12 cents to $7.33 a barrel, the most since the Oct. 12 closing price, according to PVM data.

Middle Distillates

BP sold a diesel cargo to Vitol at a $20 a ton premium to February gasoil for delivery to Amsterdam. That compares to a deal at plus $25 on Jan. 3.

Diesel barges traded at $16 a ton more than February gasoil versus plus $16 to $19 in the previous session, the survey of Platts showed. Argos, Glencore International Plc, BP, JPMorgan Chase & Co. and OAO Lukoil’s Litasco unit sold the fuel. Vitol and Phillips 66 bought, according to the survey.

Heating oil barges traded at $1 a-ton discount and a $1 premium to February gasoil. That compares with deals from $1 a ton discount to parity against the marker yesterday. Mercuria Energy Trading SA and Shell bought, and Vitol and Gunvor sold.

Glencore sold two low-sulfur gasoil barges at $15 and $15.75 ton premiums to February gasoil. Statoil and DS-Mineraloel GmbH bought.

Gasoil for February delivery fell 1.9 percent to $941 a ton, as of 5:39 p.m. London time. The contract was $4.25 a-ton in backwardation, or premium, to March. The market structure can signal rising demand or falling supply.

Gasoil’s crack narrowed to $16.11 a barrel versus $16.52 a barrel at 4:30 p.m. yesterday. Brent lost 1.5 percent to $110.21 a barrel.

Diesel shipments to Europe from the U.S. Gulf Coast are poised to gain over the next two weeks, a separate Bloomberg survey showed.

Traders booked a total of five tankers in the two weeks to Jan. 24 and four more will probably be hired, according to the median estimate in a survey yesterday and today of five shipbrokers who specialize in the trade.

Residues

High-sulfur fuel oil changed hands from $599 to $599.50 a ton, the survey of Platts showed. That compares with $617.50 to $619 yesterday. The low-sulfur grade traded at $630.

An upward trend in fuel oil stockpiles in the ARA-area in recent weeks, if continued, may eventually encourage shipments of the product to Asia, Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA in London, said in a report today.

Fuel oil stockpiles in independent storage in ARA increased to 923,000 tons, the most in two months, in the week to Jan. 10, PJK International BV said yesterday.

To contact the reporter on this story: Konstantin Rozhnov in London at krozhnov@bloomberg.net

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

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