Asia’s naphtha refining margins fell for the third consecutive session on Tuesday to touch their lowest in almost three weeks, as regional supply firmed while demand slipped, and as no trades of the distillate product took place at the closing window.
The crack (NAF-SIN-CRK) dropped $3.26 from the previous day to $93.82, its weakest level since Dec. 18, in a steady backwardation of $5.50.
Supplies of naphtha from the Middle East, Asia’s top exporting region, expanded significantly by 34% month-on-month to 3.6 million metric tons in December, offsetting a sharp drop in Western arbitrage arrivals, LSEG Oil Research said in a report on Monday.
Still, “intra-Asian flows ended 2024 by tumbling to a record low of less than 900,000 metric tons in the month, down by 2% from a month earlier.”
On the demand end, Asia’s demand accelerated declines from September on the back of ongoing reduced run rates at ethylene crackers across the region, LSEG said.
“Lengthy shutdowns at some plants struggling with persistently lacklustre downstream petrochemical margins” compounded Asian demand weakness, LSEG added.
Demand from major regional consumer China slipped from the previous month to around 700,000 metric tons for December, data from LSEG showed.
In the gasoline market, the margins (GL92-SIN-CRK) were steady at $7.21 as 100,000 barrels of the benchmark octane grade changed hands by the end of the session.
NEWS
Oil prices fell for a second consecutive session on Tuesday as optimism over demand faded, although concerns about tighter Russian and Iranian supply amid widening Western sanctions checked losses.
China’s Shandong Port Group issued a notice on Monday banning U.S. sanctioned oil vessels from its network of ports, according to three traders, potentially restricting blacklisted vessels from major energy terminals on China’s east coast.
The volume of global crude exports in 2024 declined 2%, the first fall since the COVID-19 pandemic, shipping data showed, due to weak demand growth and as refinery and pipeline changes reshuffled trade routes.
South Sudan aims to resume oil production at its Blocks 3 and 7 on Jan. 8 with initial output of 90,000 barrels per day, Petroleum Minister Puot Kang Chol said on Tuesday.
SINGAPORE CASH DEALS
Two gasoline trades, no naphtha trades.
Source: Reuters