BLBG: Asia Fuel Oil Rises for Eighth Week; Naphtha Falls: Oil Products
Asia fuel oil rose for the eighth week, the longest gaining streak since 2007, after a March 11 earthquake in Japan damaged nuclear power plants. Gasoil refining margins gained while those for naphtha fell.
Fuel Oil
Asian benchmark 180-centistoke fuel oil rose 0.4 percent this week to $652.25 a metric ton, according to data compiled by Bloomberg. That capped the longest streak since the eight weeks ended April 13, 2007. The price of 380-centistoke fuel oil, mainly used as marine fuel, rose 0.4 percent to $637 a ton.
Fuel oil’s discount to Dubai crude, or the crack spread, fell 71 cents, or 8.8 percent, to $8.80 a barrel this week, Bloomberg data showed.
Japan’s demand for fuel oil may rise as utilities use more of the fuel to replace lost nuclear capacity following the March 11 earthquake, according to Credit Agricole SA.
Singapore’s stockpiles of residues, or fuel oil, declined for the third week, a unit of the Ministry of Trade and Industry said yesterday. Onshore inventories of residues, including fuel oil and low-sulfur waxy residue and excluding bitumen, fell 2.3 percent to 18.5 million barrels in the seven days to March 16, the longest losing streak since the three weeks to Jan. 6.
Engineers plan to work into the night to restore power to two of the crippled reactors at Japan’s damaged Fukushima Dai- Ichi power plant. Prime Minister Naoto Kan described the crisis as “very grave.”
BP Plc sold 20,000 tons of 180-centistoke fuel oil loading April 5 to April 9 to Vitol Group at a premium of $4 a ton over benchmark prices.
Light Distillates
Open-specification naphtha for delivery to Japan fell 0.3 percent to $980.75 a ton, Bloomberg data showed. The premium of Japan-delivered naphtha to Brent, or the crack spread, declined to $109.67 a ton from $124.15 a ton at the end of Asian trading on March 11, Bloomberg data showed.
Benchmark 92-RON gasoline rose 1 percent to $119.85 a barrel this week. Gasoline’s premium to naphtha widened $1.40 to $12.50 a barrel, Bloomberg data showed. A wider reforming margin means the profit from turning naphtha into gasoline is increasing.
People moving away from Japan’s damaged Fukushima nuclear plant may push up gasoline imports this month amid supply curbs from refinery outages.
Japan’s gasoline consumption will climb by 80,000 barrels a day in March as the number of people traveling by car rises, Christophe Barret, London-based oil analyst at Credit Agricole SA, said in a report today.
ConocoPhillips sold 50,000 barrels of 97-RON gasoline loading April 2 to April 6 to Royal Dutch Shell Plc at $123.20 a barrel. Total SA sold 50,000 barrels of 92-RON loading the same period to Trafigura Beheer BV at $119.90 a barrel.
Middle Distillates
Gasoil, or diesel, with 0.5 percent sulfur, climbed 3.3 percent this week to $133.50 a barrel. Jet fuel rose 3.1 percent to $134.75 a barrel.
The premium of gasoil to Dubai crude, a measure of refining profit for the fuel, rose 97 cents, or 4.3 percent to $23.58 a barrel, Bloomberg data showed. The crack spread surged to $24.09 a barrel on March 16, the widest since Sept. 26, 2008, as refinery outages in Japan led to shortages.
PetroChina Co. plans to ship 220,000 metric tons of fuel to Japan to aid disaster recovery following the earthquake, President Zhou Jiping said in Hong Kong yesterday.
Shell sold 165,000 barrels of jet fuel loading April 8 to April 12 to Glencore International AG at a premium of 20 cents over benchmark prices.
Shell bought 150,000 barrels of gasoil with 10-parts-per- million of sulfur from Vitol at a premium of $4.60 a barrel over prices of the 0.5 percent sulfur gasoil grade published by Platts. The cargo was for loading April 2 to April 6.
Refinery News
Cosmo Oil Co., a Japanese refiner partly owned by Abu Dhabi, plans to boost processing rates at its other plants to make up a shortfall after its Chiba facility was shut by a fire caused by the earthquake. Cosmo plans to boost processing runs at its Yokkaichi facility by 50,000 barrels a day and at the Sakaide refinery by 30,000 barrels, the company said in a statement yesterday.
To contact the reporter on this story: Ann Koh in Singapore at akoh15@bloomberg.net;
To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net
