Asia Naphtha/Gasoline-Naphtha crack rebounds on firm demand, snug supplies

Asia's naphtha crack rebounded on Tuesday as robust demand and tighter supplies supported the market

  

SINGAPORE- Asia's naphtha crack rebounded on Tuesday as robust demand and tighter supplies supported the market.

Oil refiners have capped crude processing rates because of weak middle distillates margins, but they have been increasing gasoline yield at the expense of naphtha, traders said.

In South Korea, for example, gasoline yields reached a record high in June while naphtha yields were at their lowest since February 2020, consultancy JBC Energy said, citing KNOC data.

"With the spread between naphtha and gasoline in Asia narrowing significantly over the last few weeks and naphtha cracks standing at multi-year highs, we would expect the world's largest importer of naphtha to prioritise production of the petrochemical feedstock once more," JBC said.

In the market, Hanwha Total sought heavy full-range naphtha for first half September delivery on Tuesday via a tender while Japan's Mitsui Chem has bought open-spec naphtha for first half October delivery at $3 a tonne below Japan quotes cost-and-freight basis with a 60-day payment.

For sell tenders, KPC offered 50,000 tonnes of full-range naphtha and 25,000 tonnes of light naphtha for loading in late August to early September. The tender will close on Wednesday with bids valid on the same day.

Asia's gasoline crack dipped on Tuesday, but held above $8 a barrel supported by firm demand from South Asia and lower exports from China and India.

Sri Lanka's Ceypetco issued a tender seeking the delivery of 2.7 million barrels of 92-octane gasoline, or nine cargoes of 300,000 barrels each, between November 2021 and June 2022. The tender will close on Aug. 31 with offers valid for 90 days.

Pakistan State Oil has also issued three tenders seeking gasoline for September delivery.

Looking ahead to U.S. weekly oil inventories data due late on Wednesday, analysts estimated that stockpiles of gasoline fell by about 1.4 million barrels last week. 

REFINERY

Essar Oil UK Limited, operator of Britain's Stanlow oil refinery, said on Monday it had appointed Deepak Maheshwari as its chief executive officer. 

More oil refineries are expected to shut down as profit margins take longer to recover to pre-pandemic levels and as the world faces a large excess in refining capacity, BP Chief Financial Officer Murray Auchincloss said. 

NEWS

Iran will respond promptly to any threat against its security, the foreign ministry said on Monday, after the United States, Israel and Britain blamed Tehran for an attack on an Israeli-managed tanker off the coast of Oman. 

Saudi Aramco and other Gulf oil producers are following in the footsteps of Abu Dhabi with plans to raise tens of billions of dollars through sales of stakes in energy assets, capitalising on a rebound in crude prices to attract foreign investors.

(Reporting by Florence Tan; Editing by Shailesh Kuber) ((Florence.Tan@thomsonreuters.com; Reuters Messaging: florence.tan.thomsonreuters.com@reuters.net))


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