Asia Naphtha/Gasoline-Naphtha cracks firm, gasoline steady as more activity awaits

Asia’s naphtha cracks firmed as prompt market fundamentals remained supportive, though open market trading activity was thin on the first trading day of the week.

Market participants were awaiting more end-October and early November discussions on the naphtha front, with expectations of a handful of buyers from northeast Asia and southeast Asia still needed to cover some requirements.

Some steam crackers operators, however, were mulling their requirements should production margins weaken again.

Mixed expectations on forward delivery Western supplies were evident, but the market expects Middle East-origin cargoes to remain ample until second-half October deliveries.

Buyers for prompt cargoes will still be under pressure to pay higher given that commercial tank stocks are still low, one northeast Asian refiner said.

Separately, term contract discussions were partially concluded between major liquified petroleum gas (LPG) buyers and sellers ahead of the winter seasonal peak demand period. Chinese buyers, however, were not part of the party given the unsteady runs of downstream propylene dehydrogenation (PDH) plants.

Gasoline-wise, cracking margins GL92-SIN-CRK and octane-92 prices continued the almost steady trend as uncertainty on demand-supply fundamentals remained. This came against a backdrop of volatile U.S. gasoline futures through Asian trading hours.

The hurricane season did not have much spillover effect on supplies unlike earlier expectations, though production disruptions is still limiting prompt spot availability for gasoline in the West, one Singapore-based analyst said.

Demand is still steady from some import regions such as the U.S. as there is still buying interest from gasoline blenders for octane boosters given the lucrative margins to convert octane-92 gasoline to octane-95 gasoline, two sellers of gasoline blendstocks said.

REFINERY NEWS REF/OUT

– The fire-damaged, gasoline-producing fluidic catalytic cracker (FCC) at Marathon Petroleum’s MPC.N 593,000 barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, is expected to be shut until late next week, said people familiar with plant operations on Friday.

NEWS

– Russia’s domestic fuel shortage should ease somewhat soon as repairs works are nearing completion at a few oil refineries, which will provide more gasoline, Russia’s news agencies cited Energy Ministry Nikolai Shulginov as saying on Monday.

– Oil prices dipped on Monday after fresh Saudi and Russian crude output cuts had driven prices to 10-month highs last week.
Source: Reuters (Reporting by Trixie Yap; Editing by Krishna Chandra Eluri)