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Glencore Buys Naphtha; ICE Gasoil at 3-Month High: Oil Products

Jan. 29 (Bloomberg) -- European naphtha advanced as Glencore International Plc bought two cargoes.

Gasoil rose to a three-month high on the ICE Futures Europe exchange, gaining for the seventh session in eight. Royal Dutch Shell Plc sold a cargo of European diesel at a lower premium.

Light Products

Four shipments of European naphtha changed hands from $947 to $953 a metric ton, according to a Bloomberg survey of traders and brokers monitoring the Platts pricing window. That’s the most in a month and compares with $946 and $947 a ton yesterday.

Glencore bought two cargoes of 12,500 tons each. Morgan Stanley and Trafigura Beheer BV were the other buyers, while Royal Dutch Shell Plc, Dow Chemical Co. and Vitol Group sold.

Naphtha’s crack, or discount to Brent, widened to $7.68 a barrel, versus $6.75 yesterday, as of 2:10 p.m. local time, according to PVM Oil Associates Ltd., a London-based broker. That’s the biggest loss in more than a week.

Gasoline in the Amsterdam-Rotterdam-Antwerp oil hub traded from $1,037 to $1,056 a ton, according to a survey of traders and brokers monitoring the Argus Bulletin Board and Platts. That’s the highest since Oct. 12 and compares with deals from $1,020 to $1,048 yesterday.

Prices in the U.S. and Europe extended gains after Hess Corp. said yesterday it will close its 70,000 barrel-a-day Port Reading refinery in New Jersey by the end of February and seek a buyer for its 19 storage terminals on the U.S. East Coast.

For the fifth day, Gunvor Group Ltd. and Total SA sold the Eurobob grade, to which ethanol is added before being sold at the pump. Chevron was also a vendor. BP Plc, Trafigura, Cargill Inc. and Vitol bought barges, which typically comprise 1,000 and 2,000 tons.

Gasoline’s crack, or premium to Brent, dropped to $12.05 a barrel, PVM data showed. The gap surged to $13.45 yesterday, which was the highest since Sept. 28. The crack remains above the five-year average for this time of year.

“We would also expect to see this news translating into a positive for European gasoline,” analysts at JBC Energy GmbH, a researcher in Vienna, said in a note today. The U.S. is Europe’s main export market for the fuel.

Middle Distillates

Shell sold a cargo of diesel to BP for delivery to Amsterdam at a premium of $13 to February gasoil futures on ICE, the survey of Platts showed. That’s down from a trade on Jan. 11 at plus $20.

Barges of the fuel changed hands at $10 more than February gasoil, according to the Platts survey. Glencore and Shell sold to Mocoh SA and Morgan Stanley. That’s up from $9 yesterday.

Mercuria Energy Trading SA sold a 30,000-ton cargo of jet fuel to BP at $83 a ton more than February gasoil. That’s down from a Jan. 23 trade at an $87 premium.

One barge of heating oil changed hands at a discount of $1 a ton to February futures, versus with trades at parity yesterday. Gunvor sold to Vitol.

Gasoil for February delivery gained as much as $16.25, or 1.7 percent, to $987 a ton on the ICE exchange, the highest intraday level since Oct. 22. It was at $985.50 as of 5:23 p.m. London time. The contract’s premium, or backwardation, to March futures grew 75 cents to $9.50 a ton. The market structure may signal declining near-term supplies or increasing demand.

Gasoil’s crack was at $16.67 a barrel, up from $16.03 as of 4:30 p.m. yesterday. Brent rose 71 cents to $114.21 a barrel.

Residues

High-sulfur fuel oil changed hands from $617 to $618.50 a ton, the survey of Platts showed. That compares with $613 to $613.75 in the previous session. The low-sulfur grade traded at $647 to $647.50 a ton, versus $646 yesterday.

Fuel oil bookings for cargoes from Western countries arriving in Asia in February rose 6 percent from a week ago to 3.4 million tons, shipping data compiled by Bloomberg show.

Refineries

Cia. Espanola de Petroleos SA, Spain’s second-largest refiner known as Cepsa, halted a hydrocracker and a distillation unit at its 190,000 barrel-a-day Huelva plant for planned maintenance, according to a company official.

The work on the units started over the weekend of Jan. 19 and Jan. 20 and will probably end in the middle of next week, the official said by phone yesterday, asking not to be identified because of company policy. The turnaround reduced the plant’s capacity by 80,000 barrels a day, the official said.

Libya’s largest oil refinery at Ras Lanuf has been closed since Jan. 24 due to technical issues, including a power failure, Abduljalil Mayuf, a spokesman for the state-run Arabian Gulf Oil Co., said yesterday.

Workers at the 220,000 barrel-a-day plant have been on strike since Jan. 25 to demand better pay, Mayuf said by phone from Benghazi.

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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