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Asia Naphtha/Gasoline-Gasoline margin tanks 63% in May

Asia’s gasoline markets tanked about 63% in May, dragged by a sudden drop this week amid lower-than-expected demand, traders and analysts said.

The refining profit margin for gasoline traded near October 2023 lows at $4.76 a barrel over Brent crude on Friday. There were no trades at the deals window for a second consecutive day after the fall in the fuel crack.

However, further downside to the market may be limited heading into the high-demand summer season amid supply cut from reduced refinery runs, analysts at LSEG Research said in a note.

On the supply side, according to LSEG Research’s estimates, gasoline shipments from China are expected to reach 650,000 metric tons-700,000 metric tons in May, up from April’s multi-year low level of 400,000 tons.

“Going forward, outflows from China are expected to stay below the 2023 monthly average of 1 million metric tons,” LSEG Research added.

NEWS

– Russian second-largest oil producer, Lukoil, plans to resume operations at its damaged CDU-6 primary unit and catalytic cracker at the NORSI oil refinery in June following maintenance, three industry sources said on Friday.

– Oil product exports from Russia’s Black Sea port of Tuapse in May were down 28.6% from initial plans at 1.093 million metric tons after an unplanned refinery stoppage, traders said and LSEG data showed.

– Saudi Arabia and its bankers will on Sunday morning start taking orders for as much as $13.1 billion worth of shares in its energy giant Aramco, in a major test of international investor interest in its market.
Source: Reuters (Reporting by Mohi Narayan; Editing by Ravi Prakash Kumar)

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