Asia Naphtha/Gasoline-Gasoline rebounds as U.S. pipeline disruption offsets virus impact

U.S. gasoline futures rose more than 3% to touch their highest in three years

  

SINGAPORE- Asia's gasoline margin rebounded on Monday as a jump in U.S. prices, following a cyberattack that shut a major fuel pipeline over the weekend, offset lower demand in the U.S. east coast due to the coronavirus pandemic.

U.S. gasoline futures RBc1 rose more than 3% to touch their highest in three years on Monday's open on concerns over gasoline shortage in the U.S. east coast after Colonial Pipeline shut its critical fuel network. 

"We believe the outage is supportive for RBOB and heating oil futures in that it will, at a minimum, cause oil product imports to be diverted away from New York and increase shipments of oil products out of tanks in New York to ports in the U.S. Southeast on U.S.-flagged tankers and barges," Energy Aspects analyst Virendra Chauhan said.

However, the consultancy expects the pipeline to restart in a few days and have limited impact on refineries in Louisiana and eastern Texas.

For naphtha, margins weakened for a third straight session as cracker operators sought cheaper liquefied petroleum gas (LPG) as feedstock.

South Korea's KPIC and Hanwha Total Petrochemical issued tenders seeking to buy naphtha for second-half June delivery, traders said.

The tenders come after YNCC bought naphtha for second-half June delivery late last week, including at least one cargo with minimum paraffin content of 70% at $7.50 a tonne premium to Japan quotes on cost-and-freight basis, they said.

Separately, Kuwait Petroleum Corp and Indian refiner HPCL issued tenders to sell cargoes loading in late May and June.

NEWS

Valero Energy chartered an oil products' tanker for storage in the U.S. Gulf Coast on Friday amid a cyber attack that shut the Colonial pipeline, the biggest U.S. fuel pipeline, two sources familiar with the matter said on Sunday. 

Traders provisionally booked at least six tankers to ship gasoline from Europe to U.S. destinations following a cyber attack that shut the United States' top fuel pipeline network, Refinitiv Eikon data showed on Monday. 

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


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