Asia fuel oil and gas swaps rise

Dubai : Asia fuel oil and gas oil swaps rose as products crack spreads strengthened, signalling improved processing profits for refiners.

High-sulfur fuel oil swaps for September recovered all of Wednesday's losses, gaining $1.75 (Dh6.4), or 0.4 per cent, to $450.50 a metric ton at 1.20pm in Singapore, according to data from broker PVM Oil Associates.

The product's discount to Dubai crude, the regional benchmark, narrowed for the first time in three days, to $4.93 a barrel.

Slowing demand

Crude in New York fell for the seventh time in eight days amid concern rising US stockpiles signal slowing demand from the world's largest oil consumer.

Distillate inventories, including heating oil and diesel, rose 1.1 million barrels last week to 174.2 million, the 12th weekly gain, according to the Energy Department.

That brought supplies to the highest since January 1983, even as imports and refining output decreased.

"You can't swing a cat without hitting a barrel of oil in the US," Stephen Schork, president of consultant Schork Group Inc. in Villanova, Pennsylvania, said in a note.

"If we see even two more weeks of consecutive builds, we will be at December 1982 levels."

PVM data

The premium of Singapore 180-centistoke fuel oil to 380-centistoke grade was unchanged after rising yesterday to $8 a ton, based on PVM data.

A wider viscosity spread shows bunker, or marine fuel, lagged behind gains in higher-quality fuel oil.

September gas oil, or diesel, swaps climbed 35 cents, or 0.4 per cent, to $85.95 a barrel, PVM data showed.

The product's crack spread, a measure of refining profit, increased for the first day in three to $11.71.

Regrade advance

Jet fuel's premium to gas oil, or the regrade, advanced for a third day, gaining to 65 cents a barrel, the highest in a week, PVM said. A widening spread indicates aviation fuel is more profitable than diesel to produce.