Asia Naphtha/Gasoline-Naphtha market flips to discount amid crude rally, weak demand

Asia’s naphtha refining profit margin flipped to negative on Friday amid a rally in crude prices, and posted a weekly loss of more than 100% on the back of persisting weak cracking margins and poor demand, traders said.

The crack shrank to a discount of $3.17 per metric ton over Brent crude compared with a premium of $5.63 a day earlier.

The gasoline crack also weakened on Friday to $3.71 a barrel over Brent crude amid a lack of deals in physical markets.

Meanwhile, China’s Sinopec Corp has applied to the government to swap some of its marine fuel export quotas for allowances to export light products such as diesel, jet fuel or gasoline, four China-based industry sources said this week.

INVENTORIES

Gasoline stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) hub rose to 1.363 million tons in the week to Thursday from 1.344 million tons in the prior week, Insights Global data showed.

Naphtha inventories fell to 194,000 tons from 220,000 tons, the data showed.

NEWS

– Oil prices jumped $2 on Friday after the U.S. tightened its sanctions programme against Russian crude exports, raising supply concerns in an already tight market, and global inventories are forecast to decline through the fourth quarter.

– As the northern hemisphere heads into winter, the U.S. and European oil sectors are counting on rising exports from Chinese refineries to ease tight global supplies of diesel, heating oil and jet fuel.
Source: Reuters (Reporting by Mohi Narayan; Editing by Eileen Soreng)