Losses from making fuel oil in Asia shrank from the widest in almost three weeks after crude costs declined. Gasoil processing profits rose to the highest in almost two weeks while naphtha margins increased.
Fuel Oil
Fuel oil’s discount to Dubai crude narrowed by 40 cents, or 5.9 percent, to $6.46 a metric ton at 10:41 a.m. Singapore time, according to PVM Oil Associates Ltd., a London-based crude and refined-products broker. The spread narrowed from $6.86 a ton yesterday, the biggest discount since June 16. High-sulfur fuel- oil swaps fell $1.61, or 0.3 percent, to $643.89 a ton.
The premium of 180-centistoke fuel oil to 380-centistoke grade was unchanged at $9.50 a ton. The spread has narrowed by 50 cents from a week ago, signaling that power-station grade fuel oil prices have fallen faster than shipping-fuel grades.
Crude oil for August delivery was at $94.76 a barrel, down 18 cents, in electronic trading on the New York Mercantile Exchange at 11:28 p.m. Singapore time.
Oil markets have shown “some clear improvement” after the International Energy Agency announced it was releasing stockpiles, Didier Houssin, the IEA’s director of energy markets and security, said yesterday, citing increasing refining margins and a narrowing price gap between light and heavy crude grades.
Middle Distillates
July swaps for gasoil fell for a second day. Prices dropped 53 cents, or 0.4 percent, to $124.07 a barrel, PVM data showed. Jet fuel’s premium to gasoil, or the regrade, rose 10 cents to $1 a barrel.
Gasoil’s premium to Dubai crude, a measure of processing profit for the fuel, rose 12 cents, or 0.7 percent, to $18.55 a barrel, according to PVM. Refining margins for the fuel are at the highest since June 22.
Light Distillates
July swaps for naphtha fell $3.50, or 0.4 percent, to $928 a ton, PVM data showed.
The crack spread, a measure of the refining margin for processing Brent crude into the petrochemical feedstock, rose to $91.35 a ton from $79.42 at the end of Asian trading yesterday, according to data compiled by Bloomberg.
To contact the reporter on this story: Ann Koh in Singapore at akoh15@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
