Europe Gasoline Falls; Gasoil Drops for Third Day: Oil Products

March 22 (Bloomberg) -- Gasoline in northwest Europe fell as Total SA sold for a second day. The fuel’s crack, or premium to Brent, dropped from close to a 10-month high.

Gasoil declined for a third day on the ICE Futures Europe exchange in London as crude slumped.

Light Products

At least 15,000 metric tons of gasoline for immediate delivery traded from $1,000 to $1,112 a ton, according to a survey of brokers and traders monitoring the Argus Bulletin Board. That compares with yesterday’s range from $1,106 to $1,125 a ton for deals in the Amsterdam-Rotterdam-Antwerp area.

Morgan Stanley was the main buyer for a second day with at least 10,000 tons. Cargill Inc. and Trafigura Beheer BV also purchased barge lots, mostly of about 1,000 tons.

Total SA and OAO Lukoil’s Litasco were the main sellers of the Eurobob grade, to which ethanol is added to make finished motor fuel.

The front-month gasoline crack was at $13.52 a barrel as of 12:58 p.m. in London, according to data from PVM Oil Associates Ltd., a London-based crude and refined-products broker. The crack rose to $13.59 on March 20, the highest level since May.

 Naphtha’s discount to Brent widened to $5.63 a barrel from $5.52 yesterday, PVM data show.

Middle Distillates

Gasoil for April delivery declined 0.4 percent to $1,022.75 a ton on the ICE exchange as of 12:59 p.m. London time. The May contract traded at $1,024 a ton, pushing that contract’s premium to April futures to $1.25 from 50 cents yesterday.

A market is described as being in contango when later-dated deliveries are more expensive than near-term supplies. It can signal falling demand or rising supply.

European demand is “bleak,” JBC Energy GmbH said in a report today. Refinery utilization rates may fall to about 81 percent this month, according to the researcher’s estimates.

Gasoil’s crack, a measure of refining profitability, was little changed at $13.66 a barrel. Brent crude decreased 0.4 percent to $123.74 a barrel.

Refineries

Repsol YPF SA will start a steam boiler at its 220,000 barrel-a-day Petronor plant in Bilbao, according to a statement on the refinery’s website.

Galp Energia SGPS SA, Portugal’s biggest oil company, said that its two refineries haven’t been affected by a strikes against austerity measures. “Both of our refineries are operating normally,” Pedro Marques Pereira, a company spokesman based in Lisbon, said today by phone.

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