Crude Oil and Refined Products

Oil and gas industry

Crude Oil

Crude oil is a natural fossil fuel which, once refined, is used to create most of the energy sources used industrially and domestically, from gasoline and diesel to power vehicles, to jet fuel for aircraft and fuel for ships.

It is also used widely in the production of chemical products such as pharmaceuticals, solvents, fertilisers, pesticides and plastics.

CapitalSV has a long history of serving some of the world’s leading refiners, providing them with a reliable and consistent supply of quality crude oils.

We also work in long term partnerships with crude oil producers, helping them to maximise the value of their supply through effective marketing.

The quality of crude oil and other feedstock dictates the level of processing and conversion necessary to achieve what a refiner sees as an optimal mix of products.

Light, sweet crude is more expensive than heavier, sourer crude because it requires less processing and produces a slate of products with a greater percentage of value-added products, such as gasoline, diesel, and aviation fuel.

Heavier, sourer crude typically sells at a discount to lighter, sweeter grades because it produces a greater percentage of lower value-added products with simple distillation and requires additional processing to produce lighter products.

Heavy Fuel and Feedstocks

With access and to storage and blending equipment in hubs, we is able to respond quickly to all kinds of demands for low and high sulphur bunker, as well as for heavy fuel for power generation.

Fuel oil, which is distilled from crude oil and often left as residue during the refining process, refers to a range of the least volatile and heaviest of the commercially used fuels.

Some 10% of fuel oil produced is used to power large ships.  A further 15% is used for heating and the remainder is used by refineries as feedstock for further upgrading.

Gasoil is an intermediate distillate product used for diesel fuel, heating fuel, and sometimes as feedstock. The term is often used interchangeably with No. 2 heating oil. It is produced at higher temperatures than kerosene and lower temperatures than residual fuel. Usually used as diesel fuel or home heating oil.

Residual fuel, alternative names for fuel oil -- high-sulfur fuel oil (HSFO), low-sulfur fuel oil (LSFO) and low-sulfur waxy residue (LSWR). Lately, due to market trends showing tendencies to Russian originated high-sulfur and low-sulfur fuel oil, mostly residual fuels are also sold with the alternative name as Mazut.

Fuel oil trading, in the form of bunkers for ships has always been a major activity. But fuel oil also drives power stations and other industrial plant and serves as a feedstock for refiners to upgrade for use in many other industries - particularly in rapidly expanding economies in the world.

The off-take and supply of fuel oil requires more than the ability to just move product from A to B. Our traders, charterers, operators and risk management teams provide innovative solutions to enable a problem free flow of fuel oil from suppliers to end-users.

Gasoline

Gasoline continues to fuel most of the world’s car fleet, it is made by blending up to ten different refined products with this blend varying from jurisdiction to jurisdiction, depending on local requirements.

Our capabilities enable us to take advantage of arbitrages that arise from often-significant price differentials that exist between or even within various countries.

At any given time, tens of gasoline tankers moving product internationally, as well as a network of owned or leased storage capacity in strategic locations that enables our customers to benefit from operational flexibility.

We work with refiners, state-owned oil companies, marketers and distributors across the globe.

Gasoline, more specifically RBOB Gasoline, is a petroleum-derived liquid mixture that has an energy density slightly lower than jet and diesel fuel but higher than high octane gas, biodiesel, or LNG. On average about 19.5 gallons of gas can be extracted from a 42 gallon barrel of crude oil.

Gasoline is one of the most important commodities in the world. This usage segment accounts for over 40% of global gasoline demand although emerging markets are quickly catching up in aggregate.

It should also be noted that taxation and subsides also play a key role in demand for oil as heavily taxed nations such as those in Europe or Japan, tend to have higher average prices and thus are more easily discouraged than those nations with low fuel taxes such as those in the Middle East and other large oil producing nations.

Middle Distillates

Middle Distillates refers to a range of refined products situated between lighter fractions, such as LPG or gasoline, and heavier products such as fuel oil. Typically they include jet fuel, heating kerosene, and gas and diesel oils, such as marine bunker fuels. Diesel is mainly used for transportation. Heating kerosene is processed for commercial and domestic heating, whereas jet fuel is used to power the engines of commercial and military aircraft.

As per ISO, there are total of 14 different grades of marine heavy fuels. These 14 different grades consist of 4 different grades of marine distillate fuels and 10 different grades of marine residual fuels. Among the four grades of marine distillates, only two of them are commonly used; MGO Class DMA and MDO Class DMB. As for the marine residuals, among the ten different grades, only five of them are commonly used in the market; FO 180 CST – Class RME180, RMF180, FO CST – Class RMG380, RMH380 and RMK380.

Jet Fuel is a type of aviation fuel designed for use in aircraft powered by gas-turbine engines. The most common fuels are Jet A, Jet A-1 and Jet B which are produced to an internationally standardized set of specifications.

JP stands for Jet Propulsion. Military facilities around the world use a different classification system of JP (Jet Propulsion) numbers. The governments of many countries maintain separate specifications for jet fuel for military use.

The reasons for separate specifications include the operational and logistical differences between the military and civilian systems and the additional demands high-performance jet fighter engines place on the fuel.

Middle distillate trading represents a central aspect of CapitalSV portfolio. Including the full range of middle distillates, including heating oil, diesel and jet.

Naphtha

Naphthas are refined or partly refined light distillates with an approximate boiling point range of 27 degrees to 221 degrees Centigrade. Blended further or mixed with other materials, they make high-grade motor gasoline or jet fuel. They are also used as solvents, petrochemical feed stocks, or as raw materials for the production of town gas.

Light Naphtha is a category of naphtha that can be rich in paraffins and is used for ethylene cracking to make petrochemicals.

However, if it is rich in aromatics and naphthenes it is used for reforming into gasoline or as blendstock for making gasoline. On the other hand, Paraffinic Naphtha is another category of naphtha with a high paraffinic content suitable for petrochemical use as an ethylene cracker feedstock.

The liquids, which differ slightly in their chemical structures and boiling points, have various applications in the refining process – the main one as a feedstock for gasoline and the manufacture of olefins by the petrochemical industry. Responding to its different usages, there is a huge demand of Naphtha in the market.

Earlier Naphtha was also being used as a major resource for power engines in 80s. Since it is made from distilling petroleum, it looks like gasoline and is a component of kerosene. Naphtha is also used to dilute heavy oils to help move through pipelines, to make high-octane gas, to make lighter fluid, and even to clean metal.

Close working relationships with our gasoline traders and the LPG desk allow us to assess relative pricing for different products and grades.

CapitalSV has steadily expanded its naphtha business. Our trading desks in Singapore, Geneva and Houston predominantly take product from the Middle East, India, Russia, Africa and supply to petrochemical companies in Far East Asia, Europe, North and South America.

Base Oils and Lubricants

Base Oils are the building blocks or a range of products including lubricating greases, motor oil and industrial oil, which are used in industrial processes and by consumers.

They are derived from the refining process, and chemicals are added to the base oils to improve the properties required by the application. There are five main groups of base oils which differ depending on the crude from which they originate and the process by which they have been refined.

We have a highly experienced base oils team which works with customers and suppliers worldwide. Our global presence enables us to access the broad range of product specifications required by our customers, which include international oil companies, specialist manufacturers and local distributors.

Lubricants are often liquid form substances introduced between two moving surfaces to reduce the friction, improving efficiency and reducing wear. They may also serve to function for dissolving or transporting foreign particles and of distributing heat. One of the single largest applications for lubricants, in the form of motor oil, is protecting the internal combustion engines in motor vehicles and powered equipment.

Typically lubricants contain 90% base oil (most often petroleum fractions, called mineral oils) and less than 10% additives. Vegetable oils or synthetic liquids such as hydrogenated polyolefin, esters, silicones, fluorocarbons and many others are sometimes used as base oils. Additives deliver reduced friction and wear, increased viscosity, improved viscosity index, resistance to corrosion and oxidation, aging or contamination.

Lubricants such as 2-cycle oil are also added to some fuels. Sulfur impurities in fuels also provide some lubrication properties, which have to be taken in account when switching to a low-sulfur diesel. Biodiesel is a popular diesel fuel additive providing additional lubricity.

Natural Gas - LNG and LPG

Natural gas is a major source of energy, but in most of the towns and cities, it is unreachable as they are located at far place from the gas fields. As transporting gas by the pipeline may prove to be a costly affair. Creates LNG by reducing the temperature to – 160 degree Celsius.

It is stored under atmospheric pressure and reduced in volume by the ratio of 1:600. As a liquid, natural gas is easier and less costly to transport, particularly where pipeline processing is not available. Once regasified at its destination, it serves the same purposes as natural gas, such as a consumer fuel for heating, cooking or electricity generation.

LPG (Liquefied Petroleum Gas) is predominantly propane and butanes, either segregated or in various ratios and mixtures of each product. LPG is a by-product of the refinery process, transported mainly in pressurised vessels. LPG is also a by-product of crude oil production (Associated Gas) and a by-product of natural gas production (Non Associated Gas).

LPG (Liquefied Petroleum Gas) is widely known for being used for the purpose of cooking and heating, as automotive fuel and petrochemical feedstock. The consumption of petrochemicals is 20% with households and the other industries.

LPG is widely referred as butane and propane. It is a flammable mixture of the hydrocarbon gases, which are used as fuel. This is mainly used for cooking equipment, heating appliances and vehicles.

We have developed a trading department in LNG and LPG to enhance the customer base utilities along with large industrial consumers. Our involvement is getting more and more significant, as the market has now become more interrelated.

Crude Oil and Refined Products

Oil and gas industry

Crude Oil

Crude oil is a natural fossil fuel which, once refined, is used to create most of the energy sources used industrially and domestically, from gasoline and diesel to power vehicles, to jet fuel for aircraft and fuel for ships.

It is also used widely in the production of chemical products such as pharmaceuticals, solvents, fertilisers, pesticides and plastics.

CapitalSV has a long history of serving some of the world’s leading refiners, providing them with a reliable and consistent supply of quality crude oils.

We also work in long term partnerships with crude oil producers, helping them to maximise the value of their supply through effective marketing.

The quality of crude oil and other feedstock dictates the level of processing and conversion necessary to achieve what a refiner sees as an optimal mix of products.

Light, sweet crude is more expensive than heavier, sourer crude because it requires less processing and produces a slate of products with a greater percentage of value-added products, such as gasoline, diesel, and aviation fuel.

Heavier, sourer crude typically sells at a discount to lighter, sweeter grades because it produces a greater percentage of lower value-added products with simple distillation and requires additional processing to produce lighter products.

Heavy Fuel and Feedstocks

With access and to storage and blending equipment in hubs, we is able to respond quickly to all kinds of demands for low and high sulphur bunker, as well as for heavy fuel for power generation.

Fuel oil, which is distilled from crude oil and often left as residue during the refining process, refers to a range of the least volatile and heaviest of the commercially used fuels.

Some 10% of fuel oil produced is used to power large ships.  A further 15% is used for heating and the remainder is used by refineries as feedstock for further upgrading.

Gasoil is an intermediate distillate product used for diesel fuel, heating fuel, and sometimes as feedstock. The term is often used interchangeably with No. 2 heating oil. It is produced at higher temperatures than kerosene and lower temperatures than residual fuel. Usually used as diesel fuel or home heating oil.

Residual fuel, alternative names for fuel oil -- high-sulfur fuel oil (HSFO), low-sulfur fuel oil (LSFO) and low-sulfur waxy residue (LSWR). Lately, due to market trends showing tendencies to Russian originated high-sulfur and low-sulfur fuel oil, mostly residual fuels are also sold with the alternative name as Mazut.

Fuel oil trading, in the form of bunkers for ships has always been a major activity. But fuel oil also drives power stations and other industrial plant and serves as a feedstock for refiners to upgrade for use in many other industries - particularly in rapidly expanding economies in the world.

The off-take and supply of fuel oil requires more than the ability to just move product from A to B. Our traders, charterers, operators and risk management teams provide innovative solutions to enable a problem free flow of fuel oil from suppliers to end-users.

Gasoline

Gasoline continues to fuel most of the world’s car fleet, it is made by blending up to ten different refined products with this blend varying from jurisdiction to jurisdiction, depending on local requirements.

Our capabilities enable us to take advantage of arbitrages that arise from often-significant price differentials that exist between or even within various countries.

At any given time, tens of gasoline tankers moving product internationally, as well as a network of owned or leased storage capacity in strategic locations that enables our customers to benefit from operational flexibility.

We work with refiners, state-owned oil companies, marketers and distributors across the globe.

Gasoline, more specifically RBOB Gasoline, is a petroleum-derived liquid mixture that has an energy density slightly lower than jet and diesel fuel but higher than high octane gas, biodiesel, or LNG. On average about 19.5 gallons of gas can be extracted from a 42 gallon barrel of crude oil.

Gasoline is one of the most important commodities in the world. This usage segment accounts for over 40% of global gasoline demand although emerging markets are quickly catching up in aggregate.

It should also be noted that taxation and subsides also play a key role in demand for oil as heavily taxed nations such as those in Europe or Japan, tend to have higher average prices and thus are more easily discouraged than those nations with low fuel taxes such as those in the Middle East and other large oil producing nations.

Middle Distillates

Middle Distillates refers to a range of refined products situated between lighter fractions, such as LPG or gasoline, and heavier products such as fuel oil. Typically they include jet fuel, heating kerosene, and gas and diesel oils, such as marine bunker fuels. Diesel is mainly used for transportation. Heating kerosene is processed for commercial and domestic heating, whereas jet fuel is used to power the engines of commercial and military aircraft.

As per ISO, there are total of 14 different grades of marine heavy fuels. These 14 different grades consist of 4 different grades of marine distillate fuels and 10 different grades of marine residual fuels. Among the four grades of marine distillates, only two of them are commonly used; MGO Class DMA and MDO Class DMB. As for the marine residuals, among the ten different grades, only five of them are commonly used in the market; FO 180 CST – Class RME180, RMF180, FO CST – Class RMG380, RMH380 and RMK380.

Jet Fuel is a type of aviation fuel designed for use in aircraft powered by gas-turbine engines. The most common fuels are Jet A, Jet A-1 and Jet B which are produced to an internationally standardized set of specifications.

JP stands for Jet Propulsion. Military facilities around the world use a different classification system of JP (Jet Propulsion) numbers. The governments of many countries maintain separate specifications for jet fuel for military use.

The reasons for separate specifications include the operational and logistical differences between the military and civilian systems and the additional demands high-performance jet fighter engines place on the fuel.

Middle distillate trading represents a central aspect of CapitalSV portfolio. Including the full range of middle distillates, including heating oil, diesel and jet.

Naphtha

Naphthas are refined or partly refined light distillates with an approximate boiling point range of 27 degrees to 221 degrees Centigrade. Blended further or mixed with other materials, they make high-grade motor gasoline or jet fuel. They are also used as solvents, petrochemical feed stocks, or as raw materials for the production of town gas.

Light Naphtha is a category of naphtha that can be rich in paraffins and is used for ethylene cracking to make petrochemicals.

However, if it is rich in aromatics and naphthenes it is used for reforming into gasoline or as blendstock for making gasoline. On the other hand, Paraffinic Naphtha is another category of naphtha with a high paraffinic content suitable for petrochemical use as an ethylene cracker feedstock.

The liquids, which differ slightly in their chemical structures and boiling points, have various applications in the refining process – the main one as a feedstock for gasoline and the manufacture of olefins by the petrochemical industry. Responding to its different usages, there is a huge demand of Naphtha in the market.

Earlier Naphtha was also being used as a major resource for power engines in 80s. Since it is made from distilling petroleum, it looks like gasoline and is a component of kerosene. Naphtha is also used to dilute heavy oils to help move through pipelines, to make high-octane gas, to make lighter fluid, and even to clean metal.

Close working relationships with our gasoline traders and the LPG desk allow us to assess relative pricing for different products and grades.

CapitalSV has steadily expanded its naphtha business. Our trading desks in Singapore, Geneva and Houston predominantly take product from the Middle East, India, Russia, Africa and supply to petrochemical companies in Far East Asia, Europe, North and South America.

Base Oils and Lubricants

Base Oils are the building blocks or a range of products including lubricating greases, motor oil and industrial oil, which are used in industrial processes and by consumers.

They are derived from the refining process, and chemicals are added to the base oils to improve the properties required by the application. There are five main groups of base oils which differ depending on the crude from which they originate and the process by which they have been refined.

We have a highly experienced base oils team which works with customers and suppliers worldwide. Our global presence enables us to access the broad range of product specifications required by our customers, which include international oil companies, specialist manufacturers and local distributors.

Lubricants are often liquid form substances introduced between two moving surfaces to reduce the friction, improving efficiency and reducing wear. They may also serve to function for dissolving or transporting foreign particles and of distributing heat. One of the single largest applications for lubricants, in the form of motor oil, is protecting the internal combustion engines in motor vehicles and powered equipment.

Typically lubricants contain 90% base oil (most often petroleum fractions, called mineral oils) and less than 10% additives. Vegetable oils or synthetic liquids such as hydrogenated polyolefin, esters, silicones, fluorocarbons and many others are sometimes used as base oils. Additives deliver reduced friction and wear, increased viscosity, improved viscosity index, resistance to corrosion and oxidation, aging or contamination.

Lubricants such as 2-cycle oil are also added to some fuels. Sulfur impurities in fuels also provide some lubrication properties, which have to be taken in account when switching to a low-sulfur diesel. Biodiesel is a popular diesel fuel additive providing additional lubricity.

Natural Gas - LNG and LPG

Natural gas is a major source of energy, but in most of the towns and cities, it is unreachable as they are located at far place from the gas fields. As transporting gas by the pipeline may prove to be a costly affair. Creates LNG by reducing the temperature to – 160 degree Celsius.

It is stored under atmospheric pressure and reduced in volume by the ratio of 1:600. As a liquid, natural gas is easier and less costly to transport, particularly where pipeline processing is not available. Once regasified at its destination, it serves the same purposes as natural gas, such as a consumer fuel for heating, cooking or electricity generation.

LPG (Liquefied Petroleum Gas) is predominantly propane and butanes, either segregated or in various ratios and mixtures of each product. LPG is a by-product of the refinery process, transported mainly in pressurised vessels. LPG is also a by-product of crude oil production (Associated Gas) and a by-product of natural gas production (Non Associated Gas).

LPG (Liquefied Petroleum Gas) is widely known for being used for the purpose of cooking and heating, as automotive fuel and petrochemical feedstock. The consumption of petrochemicals is 20% with households and the other industries.

LPG is widely referred as butane and propane. It is a flammable mixture of the hydrocarbon gases, which are used as fuel. This is mainly used for cooking equipment, heating appliances and vehicles.

We have developed a trading department in LNG and LPG to enhance the customer base utilities along with large industrial consumers. Our involvement is getting more and more significant, as the market has now become more interrelated.

World oil Platts

World oil Argus