Asia Naphtha/Gasoline-Naphtha crack touches 5-week high; gasoline back above $7/bbl

Asia's naphtha crack gained for a fifth straight session on Tuesday


NEW DELHI- Asia's naphtha crack gained for a fifth straight session on Tuesday and hit a five-week high on hopes of firm demand.

The crack rose to $141.43 a tonne, the highest since mid-August, from $139.15 on Monday, while the prompt inter-month spread was unchanged at $7.25 in backwardation.

"The prevailing market strength is expected to be sustained on strong demand from the petrochemical sector, with persistently high prices of rival cracker feedstock liquefied petroleum gas (LPG) having also made switching economics unworkable," Refinitiv Oil Research said in a report late on Monday.

Naphtha supplies, on the other hand, are likely to be squeezed on limited incoming arbitrage inflows next month, the report said.

The region's gasoline crack rose above the mark of $7 a barrel to $7.36 after three consecutive days of losses, as analysts forecast a decline in U.S. inventories. The crack was at $6.87 in the last session.

Indicating strong demand, U.S. stockpiles of gasoline fell about 200,000 barrels last week, a preliminary Reuters poll showed. 


- A global drive towards electrification of road transport to reduce carbon emissions may cut demand for the world's oil refining capacity by half in 2050, consultancy Rystad Energy says. 

- Oil prices rose amid tighter U.S. supplies, ending days of losses as global markets remain haunted by the potential impact on China's economy of a crisis at heavily indebted property group China Evergrande. 

(Reporting by Mohi Narayan; editing by Uttaresh.V) ((;))

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