Asia’s gasoline margins dipped on Thursday, as excess regional supplies continued to exert downward pressure on the market.
Regional traders said they are bearish on the short-term gasoline market and do not expect margins to pick up till the end of January 2025.
The crack dipped to $4.25 per barrel over Brent crude from $4.32 on Wednesday.
Traders added some regional suppliers have high storage of gasoline and may cut blending, which has witnessed exceptionally low demand, further weakening market sentiments.
Naphtha margin dipped by $8.53 to an almost two-week low of $87.63 per metric ton over Brent crude, its lowest since Sept. 2.
Prompt naphtha monthly spread flipped to a 50-cent-per-ton contango, indicating a comfortable supply.
Traders said that incoming Russian cargoes are struggling to find storage and are being diverted to the East, with Brazil rejecting Russian cargoes, adding pressure to the market.
“China’s macro outlook is not great, downstream margins are poor, the year-end stocking forthcoming, and with new plants coming in 2025 which should pressurise margins further, are making end users very cautious,” a regional trader said.
INVENTORIES
Singapore light distillates stocks rose by 207,000 barrels to a 5-week high of 14.124 million barrels in the week ending Nov. 13, data from Enterprise Singapore showed. O/SING1
U.S. gasoline inventories rose by 312,000 barrels, and distillate stocks rose by 1.14 million barrels, in the week ending Nov. 8, market sources said, citing the American Petroleum Institute.
NEWS
Oil prices slipped in early trade on Thursday, reversing most of the previous session’s gains on a stronger dollar and worries of higher global output amid slow demand growth forecasts.
U.S. refiner margins for gasoline and diesel will be relatively unchanged next year, the U.S. Energy Information Administration said on Wednesday, signaling relief for fuel producers who saw profits slump sharply since 2022 on slowing demand growth.
Net income at Japanese oil refiners fell in the first half of their fiscal year, but they maintained profitability and outperformed their South Korean rivals as strong domestic margins shielded them from a weak overseas market.
SINGAPORE CASH DEALS O/AS
Five gasoline deals and one naphtha trade.
Source: Reuters (Reporting by Haridas; Editing by Vijay Kishore)