Asia’s naphtha refining margins dipped on Friday but posted a weekly rise, as traders weighed the prospect of tighter supply flows amid U.S. President Donald Trump’s tariff and sanction pledges against higher global inventories.
The crack (NAF-SIN-CRK) ticked $0.23 lower from the previous day to $90.90, edging 0.17% higher for the week.
In the gasoline market, refining margins (GL92-SIN-CRK) strengthened $0.48 from the earlier session to $7.73. The crack gained 81.03% this week, posting its steepest weekly rise since November 2023 on the back of global supply concerns.
Trump has threatened to impose a 25% tariff as early as Saturday on Canadian and Mexican exports to the U.S. if the two countries do not end shipments of fentanyl across U.S. borders.
On Thursday, the U.S. President said he would soon decide whether to exclude oil imports from the tariffs.
He also said last week that he would likely impose sanctions on Russia if its president refuses to negotiate about ending the war in Ukraine.
The shortfall of fungible and tradeable residuals volumes from Russia, particularly in Singapore, will add to price volatility and incentivise refiners along the East-West maritime route to increase residual output, LSEG Oil Research said in a report.
Still, beyond seasonal tailwinds, limited upside is anticipated for refined product markets, with structural challenges such as oversupply, alternative fuels, and a relatively weak global economy continuing to pose significant risks, LSEG added.
INVENTORIES
Light distillate stocks in Singapore, including naphtha and gasoline, rose by 0.74 million barrels to a nearly one-month high of 15.29 million barrels in the week to Jan. 29, data from Enterprise Singapore showed on Thursday.
At the Fujairah Oil Industry zone, light distillate inventories held at Fujairah Oil Industry Zone jumped by 1.117 million barrels to an over seven-month high of 7.458 million barrels in the week ended Jan. 27, according to industry information service S&P Global Commodity Insights.
Gasoline stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rose by more than 2.5% on the week to extend their record high, data from Dutch consultancy Insights Global showed.
Gasoline stocks rose to 1.63 million metric tons, with refinery production in the region high while exports remain slow, said Insight Global’s Lars van Wageningen.
Expectations of higher exports in the coming week could result in some stock draw as gasoline tank space is also limited, he added.
NEWS
Oil prices edged down on Friday and were on course for a weekly decline as markets wait to see if U.S. President Donald Trump follows through on his threat to impose tariffs on Mexico and Canada this weekend.
Malaysian state-owned energy firm Petroliam Nasional Berhad UUSY68851AK3 will look to boost the country’s oil and gas output through key projects over the next three years, it said in its activity outlook report.
SINGAPORE CASH DEALS
Two gasoline trades and one octane-95 gasoline trade.
Source: Reuters