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Naphtha Declines as Vitol Sells; ICE Gasoil Falls: Oil Products

Jan. 16 (Bloomberg) -- European naphtha fell for the first time this week as Vitol Group sold a cargo, bringing its total to at least 15 lots this month.

European gasoline’s crack, or premium to Brent crude, declined to the lowest in more than two weeks. Gasoil dropped on the ICE Futures Europe exchange in London.

Light Products

Vitol sold the 12,500 metric-ton cargo of naphtha to Trafigura Beheer BV at $902, down from a deal at $904 yesterday, according to a Bloomberg survey of traders and brokers monitoring the Platts pricing window.

Naphtha’s crack, or discount to Brent, widened for the first time this week, to $8.28 a barrel as of 2:02 p.m. local time, according to data from PVM Oil Associates Ltd., a broker in London. It was at $8.73 on Jan. 11, the biggest spread in more than five months.

Gasoline barges in the Amsterdam-Rotterdam-Antwerp oil hub changed hands at $964 a ton, according to the Platts window survey. That’s down from $964 to $970 yesterday. Gunvor Group Ltd. sold the Eurobob grade, to which ethanol is added to finished fuel, to Trafigura and Cargill Inc.

Gasoline’s crack, a measure of refining profit, shrank 64 cents to $5.87 a barrel, according to PVM data. That’s the lowest since Dec. 31.

Middle Distillates

Diesel barges changed hands at $12 to $14.50 a ton more than February gasoil on the ICE Futures Europe exchange, according to the survey of Platts. That’s little changed from yesterday. Total SA, Argos Groep BV, Royal Dutch Shell Plc and Glencore International Plc were sellers, while Morgan Stanley, Phillips 66, Hess Corp.’s Hetco, Fritz Meyer AG and Vitol were buyers.

Gunvor sold two barges of heating oil at parity to February futures, unchanged from yesterday, the survey showed. Vitol and Shell bought.

JPMorgan Chase & Co. sold a low-sulfur heating oil barge to Belgomine NV at $9 a ton more than February futures. That compares with plus $14.50 on Jan. 14.

Shell sold two barges of jet fuel, one at a $69 a ton premium to February gasoil and the other at a $3 discount to benchmark prices, the survey of Platts showed.

German household heating oil tanks were 58.7 percent full in December, according to Ipsos Loyalty GmbH. That’s down from 59.9 percent in November and compares with 57.6 percent a year earlier, data sent today in an e-mailed report show.

Commercial inventories fell to 38.4 percent last month, versus 41.5 percent in November. The stockpiles were at 45 percent in December 2011, the Ipsos data showed.

Gasoil for February delivery declined $7.50, or 0.8 percent, to $953.25 a ton as of 5:29 p.m. on ICE. The contract’s backwardation, or premium to March, was $7.50 a ton. This market structure can signal rising near-term demand or falling supply.

“With this backwardation and the decent winter weather, there will not be a lot of distillates left in tank when winter comes to an end and the diesel demand starts to kick in,” Olivier Jakob, managing director of Switzerland-based researcher Petromatrix GmbH, said today in a note.

Temperatures in Frankfurt are forecast to drop to minus 6 degrees Celsius (21 Fahrenheit) on Jan. 19 from minus 3 today, according to data from CustomWeather Inc. Temperatures will also fall below zero in London, Paris and Amsterdam this week, the data show.

Gasoil’s crack weakened to $17.32 a barrel versus $17.58 at 4:30 p.m. yesterday. Brent rose 0.3 percent to $110.60 a barrel.

Residues

High-sulfur fuel oil changed hands from $603 to $604 a ton, the survey of Platts showed. That compares with $603.50 to $605 the previous session. The low-sulfur grade traded at $633 a ton, versus $633 to $636 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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