Asia Naphtha/Gasoline-Naphtha margin gains but petchem demand stuck in doldrums

Asia’s naphtha markets gained on Monday after flat prices plunged by $7 amid easing tensions in the Middle East, although demand from petrochemical facilities remained week, traders and analysts said.

The crack NAF-SIN-CRK rose by about $3 to $5.57 per metric ton over Brent crude, compared with $1.93 in the previous session. The second-half December naphtha price weakened to $649 per ton and traded $2 cheaper than the following month in contango structure.

However, poor downstream cracking margins continued to weigh on market sentiment.

“Downstream demand remains weak with no material sign of recovery, which limits the upside to premiums,” analysts at FGE said in a client note.

In tenders, Singapore’s PCS signed a term deal for minimum 75% naphtha with a Arab Gulf company for delivery over January-December next year at a discount of around $5 to mean of Platts Japan (MOPJ) naphtha, market participants said.

In gasoline markets, the crack GL92-SIN-CRK rose above $7 per barrel over Brent crude on Monday.

NEWS

– China’s oil refinery utilisation rates are easing from record third-quarter levels as thinning margins and a shortage of export quotas discourage plants from raising output for the rest of 2023, according to traders and industry consultancies.

– Saudi Aramco has kept its December Arab Light grade official selling price (OSP) for Asian customers unchanged from the prior month, pausing a five-month price hike cycle, a company statement showed

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Source: Reuters (Reporting by Mohi Narayan)