Petrobras said it has increased competition with distributors and traders through recent fuel auctions linked to futures contracts priced in U.S. dollars, a change in strategy that analysts have said “could dramatically alter the domestic fuel sector”.

Last week, Petrobras organised a fuel auction with pricing linked to Nymex futures contracts, which is the second such offer using the Nymex basis. The company sold a total of 5mn l of unblended gasoline, less than 17pc of the 30mn l offered, for delivery between 20-23 August at Ipojuca in the northeastern state of Pernambuco, site of the company’s 115,000 b/d Abreu e Lima refinery, at a discount of 6.6¢/USG to the September Nymex contract, in line with the initial bid offered by the state company.

On the same day, the weekly Argus indicator for delivery of imported gasoline to up to two ports in the north and northeast closed at September Nymex -7.5¢/USG, excluding port storage and terminal transfer costs.

The effective price of the Petrobras auction was R1,639.2/m³ (118¢/USG) considering Brazil’s central bank’s exchange rate of R5.2143 per U.S. dollar. On the spot market, Petrobras offers a sale price of R1,631.6/m³ in the same port for prompt delivery to its terminal.

Elsewhere, the company also organised an auction for the sale of 48mn l of S10 diesel for delivery between 15-18 August. The final sales value for the 9.7mn l that was sold was a discount of 1¢/USG in relation to September Nymex.

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31st July 2020