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Asia Naphtha/Gasoline-Gasoline refining margin plunges below $4/bbl

Asia’s gasoline markets tanked below $4 per barrel on Thursday as a larger-than-expected buildup in U.S. inventories weighed on gains emerging from a draw in Singapore stocks.

The profit on making a barrel of gasoline in Singapore fell to $3.50 per barrel over Brent crude, the lowest level since Oct. 20 last year.

At the Singapore deals window, three trades went through at $85.90 per barrel, market participants said.

U.S. gasoline stocks increased by 2.6 million barrels last week to 233.51 million barrels, the U.S. Energy Information Administration (EIA) said on Wednesday. That compared with analysts’ estimates in a Reuters poll for a 0.9 million-barrel rise.

Refinery crude runs fell by 97,000 barrels last week, EIA said. Refinery utilization rates fell by 0.4 percentage points.

Traders and analysts are worried about the slower pace of pick-up in U.S. summer demand, typically a robust demand season. The U.S. is world’s biggest gasoline market.

“While implied gasoline demand increased by 94,000 barrels per day(bpd) week-on-week, the four-week average gasoline demand figure is still around 124,000 bpd lower year-on-year, analysts at ING said in a note.

Meanwhile, Singapore light distillate stocks fell by 1.078 million barrels to a two-week low of 15.137 million barrels in the week to June 12, Enterprise Singapore data showed.

TENDERS

QatarEnergy inked a long-term deal with India’s Haldia Petrochemicals Ltd (HPL) under which it will supply 2 million tons of light naphtha to HPL via its subsidiary in Singapore over a period of 10 years starting July 2024, the two companies said in a statement on Thursday.

NEWS

– South Korean refiner Hyundai Oilbank has reduced production at the larger of its two crude distillation units (CDUs) in Seosan because of production woes at a gasoline-making unit, two industry sources with knowledge of the matter said on Thursday.
– Russian naphtha shipments to South Korea have slowed amid a probe by the country into whether fuel from Russia has been mislabelled as supply from places where cargoes have been transshipped, according to trade sources and shipping data.
Source: Reuters (Reporting by Mohi Narayan; Editing by Sonia Cheema)

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