Friday, September 2, 2011

Gunvor Buys Europe Gasoline Barges; Gasoil Falls: Oil Products

By Nidaa Bakhsh -

Gunvor Group Ltd. and Trafigura Beheer BV were the main buyers of gasoline barges in northwest Europe. The motor fuel’s crack, or premium to Brent crude, increased.

Gasoil traded on London’s ICE Futures Europe exchange dropped as Brent fell. The heating fuel’s crack narrowed. Ineos Group Holdings Plc flared gases at its Cologne chemicals plant in Germany as it shut cracker 4 for maintenance.

Light Products
Eurobob gasoline for immediate loading in Amsterdam- Rotterdam-Antwerp traded from $1,062 to $1,068 a metric ton, according to a survey of traders and brokers monitoring the Argus Bulletin Board. That compares with yesterday’s trades from $1,054 to $1,083 a ton.

Gunvor SA, the trading arm of Gunvor Group, bought 8,000 of the 15,000 tons that changed hands. Trafigura purchased 4,000 tons. Mabanaft BV and Statoil ASA were the main sellers. The trades are typically for 1,000 tons or 2,000 tons. Ethanol is added to the Eurobob grade to make finished motor fuel.

Gasoline’s crack expanded to $5.71 a barrel from $5.60 yesterday, according to PVM Oil Associates Ltd., a crude and refined products broker in London.

Naphtha’s discount to Brent widened 2 cents to $4.32 a barrel, according to PVM.

Middle Distillates
Gasoil for September dropped 1.2 percent to $955 a ton as of 12:06 p.m. London time on the ICE exchange. The more-actively traded October contract fell 1.1 percent to $953.50 a ton. Front month Brent declined 0.6 percent to $113.56 a barrel.

The narrowing of the backwardation between September and October gasoil may be attributed to increased supplies. The spread is at $1.50 a ton, down from $6 at the beginning of the week, according to data compiled by Bloomberg. Backwardation refers to later-dated material being cheaper than near-term delivery.

“We have argued for quite some time that the strongly backwardated market structure would be short-lived as supplies increase on the back of comparatively high refinery runs and material coming in from markets East of Suez,” JBC Energy GmbH, a Vienna-based researcher, said today in a note.

Gasoil’s crack, a measure of refining profitability, narrowed to $14.44 a barrel from $14.67 yesterday, according to ICE data.

To contact the reporter on this story: Nidaa Bakhsh in London at

To contact the editor responsible for this story: Stephen Voss at

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