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Naphtha margin narrows sharply this week, gasoline steady

Asia’s naphtha refining profit margin shrank by as much as six times this week amid persisting poor petrochemical demand in China and rising discounted Russian supplies.

The discount on naphtha crack increased by about $6 to $14.35 a tonne over Brent crude and the market flipped back into backwardation of 25 cents.

Russian naphtha inflows into Singapore rose to 322,538 tonnes in May from 151,207.60 tonnes in April, Enterprise Singapore data showed.

Meanwhile, Indian Oil offered 35,000 or 55,000 tonnes of naphtha for loading during June 28-30 from the Chennai port, market participants said.


Gasoline markets were steady this week amid buying interest from India, even as Chinese supplies in May rose. HPCL and Indian Oil issued buy tenders for gasoline for mid- and late-June delivery in the face of scheduled maintenance.

“Asian gasoline cracks have been lagging their Atlantic Basin counterparts by a wide margin. That said, refinery maintenance followed by some run cuts should tighten the regional balance,” energy consultancy FGE said in a note.


– Russian gasoline exports grew by 37% year-on-year to 2.5 million tonnes from January to May, despite the impact of Western sanctions, the Kommersant newspaper said on Friday.

– Saudi Arabia kept under wraps its plan to make a deep cut to its own oil output during a weekend of OPEC+ talks in Vienna, several OPEC+ sources told Reuters, with some member states only learning about the reduction from the final news conference.


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Source: Reuters

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