Asia Naphtha/Gasoline-Naphtha crack inches up after two-day fall

Asia’s naphtha margins edged up after dipping for the two sessions. The crack climbed up by $0.70 to $110.65 per metric ton over Brent crude.

Traders said that the demand for the light distillate is expected to receive a boost from the restart of two ethylene crackers in the region this month, while cracker offline capacity should ease further in November.

Total naphtha flows into Asia for October have been tentatively projected at 5-5.5 million metric tonnes (mt), contracting substantially from the previous month’s close of 6-6.1 million mt, an LSEG report said.

The decline in inbound supplies was mainly underpinned by a sharp pullback of Middle Eastern arrivals, which retreated from the previous month’s record high of 4 million mt to 2.5 million mt so far, as shipments from the Arab Gulf’s top naphtha exporter, the United Arab Emirates, led with the largest decline as volumes more than halved on-month to less than 750,000 mt and slumping to an over four-year low, the report added.

In gasoline, the crack inched up to $4.22 per barrel over Brent crude.

INVENTORIES

Light distillate stocks, including naphtha and gasoline, at the Fujairah commercial hub rose by 1.499 million barrels to 6.687 million barrels in the week ending Oct. 7, S&P Global Commodity Insights data showed.

U.S. gasoline inventories fell by 557,000 barrels, and distillate stocks fell by 2.60 million barrels in the week ending Oct. 4, according to market sources citing the American Petroleum Institute.

NEWS

Oil prices edged up on Wednesday as developments in the Middle East took centre stage against cautious demand expectations and ahead of a government meeting on China’s fiscal policy.

Brent crude futures rose 45 cents, or 0.6%, to $77.63 a barrel. U.S. West Texas Intermediate futures CLc1 rose 33 cents to $73.90 a barrel.

Russia plans to take offline 4.0 million metric tons of refining capacity in October, an increase of 67% from an earlier plan, to carry out maintenance, according to Reuters calculations based on data from industry sources.

Global and U.S. oil demand growth next year will not meet prior forecasts due to weakening economic activity in China and North America, the U.S. Energy Information Administration (EIA) said on Tuesday in its Short-Term Energy Outlook report. World oil demand is expected to grow 1.2 million barrels per day to 104.3 million barrels per day (bpd) next year, about 300,000 bpd below prior forecasts, the EIA said.

SINGAPORE CASH DEALS

Two gasoline deals and one naphtha trade.
Source: Reuters (Reporting by Haridas; Editing by Vijay Kishore)