Asia Naphtha/Gasoline-Naphtha margin rises, backwardation widens to $6/t

Asia’s naphtha refining profit margin rose on Tuesday on the back of healthy activity in spot markets, but the gains were limited by volatility in crude oil benchmarks due to persisting tensions in the Middle East.

The crack rose by about $2 to $48.40 per metric ton over Brent crude. The backwardation between first-half June and first-half July naphtha prices widened to $6 a ton, compared with $3.25 a day earlier.

In physical markets, traders SK Energy and Vitol bought 25,000 tons of naphtha each for second-half June and first-half July arrival, market participants said.

Analysts and traders said crude oil will continue to give direction to naphtha cracks in the near term.

NEWS

– Oil prices gained on Tuesday after stronger economic data out of Europe, as investors also weighed the potential fallout from any fresh U.S. sanctions on Iran’s oil exports with tensions remaining high in the Middle East.

– Pakistan’s plans to deregulate fuel prices could lead refiners to halt planned upgrades worth up to $6 billion and force some refineries to close, some of the country’s top refiners said in a letter to the country’s oil regulator.

SINGAPORE CASH DEALS O/AS

Two naphtha trades, three gasoline deals.
Source: Reuters (Reporting by Mohi Narayan; Editing by Shounak Dasgupta)