Asia fuel oil rose to the highest in a month as the product’s discount to crude narrowed. Naphtha fell as the crack spread dropped to the lowest in 12 weeks.
Fuel Oil
Benchmark 180-centistoke fuel oil climbed $14, or 2.1 percent, to $675.50 a metric ton, according to data compiled by Bloomberg. The price of 380-centistoke fuel oil, mainly used as marine fuel, increased $14, or 2.2 percent, to $665.50. Each variety rose to the highest since May 5.
Fuel oil’s discount to Dubai crude narrowed 20 cents to $4.83 a barrel, based on Bloomberg data. The difference is the narrowest since March 16, indicating decreasing losses for refiners turning oil into residual products.
The premium of 180-centistoke fuel oil to 380-centistoke grade was unchanged after rising to $10 a ton, Bloomberg data showed. This viscosity spread has narrowed 2.5 percent so far this week, meaning bunker prices are rising faster than higher- quality fuel oil.
Light Distillates
Open-specification naphtha for delivery to Japan dropped $6, or 0.6 percent, to $953 a ton, according to Bloomberg data. Naphtha’s premium to London-traded Brent crude declined $2.16 to $77.02. This crack spread was at the narrowest since March 17, signaling eroding profit from making the petrochemical feedstock.
Benchmark 92-RON gasoline in Singapore rose $2.35, or 2 percent, to $120.70 a barrel, Bloomberg data showed. Gasoline’s premium to naphtha jumped $3.05 to $16.75, the highest since May 6, based on Bloomberg data. A widening reforming margin shows it’s more profitable to turn naphtha into gasoline.
Middle Distillates
Gasoil, or diesel, with 0.5 percent sulfur increased 95 cents, or 0.8 percent, to $128.40 a barrel, according to Bloomberg data. Jet fuel gained 90 cents, or 0.7 percent, to $129.05. Each product rose to the highest in a week.
Gasoil’s premium to Asian benchmark Dubai crude was up 16 cents at $20.17 a barrel at 6 p.m. Singapore time, based on data from PVM Oil Associates, a broker. This crack spread, a measure of refining profit, climbed for a second day.
Jet fuel’s premium to gasoil was unchanged after rising to 70 cents a barrel, PVM said. This regrade is down 6.7 percent so far this week, indicating it’s less profitable to produce aviation fuel over diesel.
To contact the reporter on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net.
