ConocoPhillips Buys Diesel in Europe; Gasoil Rises: Oil Products c.2011 Bloomberg News

Aug. 12 (Bloomberg) -- ConocoPhillips bought a cargo of diesel in northwest Europe from Morgan Stanley. Barges of the ultra-low-sulfur grade traded at a cheaper price than yesterday.

Gasoil gained on London’s ICE Futures Europe exchange as Brent advanced. Gasoline barges for immediate loading rose as stockpiles fell for a fourth week.

Light Products

Eurobob gasoline for loading in Amsterdam-Rotterdam-Antwerp traded from $967 to $980 a metric ton, according to a survey of traders and brokers monitoring the Argus Bulletin Board. That compares with deals yesterday from $946 to $965.

Vitol Group bought 4,000 tons of the 7,000 tons that changed hands. Ethanol is added to Eurobob to make finished motor fuel. The trades are typically for 1,000 or 2,000 tons.

Gasoline inventories in independent storage in the ARA-area dropped 10 percent to 554,000 tons in the week to yesterday on exports to Canada, Nigeria, the U.K. and the U.S., according to PJK International BV, a researcher based in the Netherlands. That’s the lowest level since Dec. 30.

The fuel’s crack shrank to $6.38 a barrel from $6.45 yesterday, according to PVM Oil Associates Ltd., a crude and refined products broker in London.

Naphtha’s discount to Brent shrank to $4.96 a barrel from $5.11 yesterday, according to PVM. That’s the lowest spread since May 27.

Middle Distillates

ConocoPhillips bought the diesel cargo at a premium of $34 a ton to September gasoil, priced for delivery to Bremen in Germany from Aug. 27 to Aug. 31, according to a survey of traders and brokers monitoring the Platts pricing window which ends at 4:30 p.m. in London. Vitol also bought a cargo from Royal Dutch Shell Plc at a $40 premium, priced for delivery to the Turkish port of Aliaga, the survey showed.

Diesel barges traded three times at a premium of $26 and once at $27.50 a ton to September gasoil, according to the survey. That’s lower than yesterday’s deals at $28 more than the gasoil contract.

Gasoil for September advanced 3.5 percent to $918.25 a ton as of 5:03 p.m. London time on the ICE exchange. Brent for the same month rose 0.4 percent to $108.50 a barrel.

The fuel’s crack, a measure of refining profitability, was little changed at $14.84 a barrel at 4:30 p.m. London time yesterday, according to ICE data.

Jet fuel traded at $71 and $72 a ton more than September gasoil, the survey showed. That compares with Aug. 10 trades at a premium of $71. A deal was also done today at $985 a ton.

Residues

High-sulfur fuel oil barges rose, trading from $602.50 to $603.75 a ton, according to the Platts survey. That compares with deals yesterday from $595 to $596.50. Low-sulfur grade traded at $632.25 a ton, higher than the $629 done yesterday, the survey showed.

Refiners

U.S. refiners may start exporting more fuels as refinery processing rates rose to close to the highest level in a year, at 90 percent of capacity, “much to the woe of European and Asian refiners,” according to JBC Energy GmbH.

Zambia’s only oil refinery will shut for maintenance from Oct. 1 to Nov. 10, October, the Times of Zambia reported today citing Teddy Kasonso, permanent secretary in the Ministry of Energy and Water Development.

The government will increase imports of gasoline and diesel before the shutdown to avert shortages, he said.

--With assistance from Rachel Graham in London. Editors: Raj Rajendran, Rachel Graham.

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

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