Asia’s RON-92 gasoline cracks declined to $13.34 per barrel on stronger oil futures despite gains in physical prices and continuously strong buying interest from one China major.

RON-95 physical price discussion levels were also supported by demand strength for a second consecutive day.

The market was generally bullish on limited prompt stock levels in China, even though domestic Chinese prices were still in a contango shape where prompt prices are lower than forward month prices.

Cautiousness however came from volatile price spreads between Asia and the U.S. the entire week, with arbitrage cargoes deemed unworkable since yesterday because of the narrower differential between the two regions.

Separately, naphtha refining margins reversed direction and declined slightly to $82.93 per tonne, reflecting the continuously weak market fundamentals.

Trading liquidity stayed thin unlike gasoline, as evidenced from the lack of deals in the open market for a fourth consecutive day, weighing on price movements.

SINGAPORE CASH DEALS

– Two gasoline deals, no naphtha deal.

NEWS

– Oil prices were broadly steady on Thursday, as the prospect of higher fuel demand in China as it reopens post-COVID curbs was offset by fears that U.S. crude stocks hitting their highest for months may signal weakening demand in the world’s no. 1 economy.

INVENTORIES

– U.S. crude oil stocks rose last week to their highest level since June 2021, helped by higher production, the Energy Information Administration said on Wednesday. U.S. gasoline stocks (USOILG=ECI) rose by 5 million barrels to 239.6 million barrels, the EIA said, far surpassing the 1.3 million barrel rise that analysts expected in a Reuters.

– Singapore middle distillates stocks held by up to 14 major oil and oil storage companies drop to a seven-week low of 7.607 million barrels as of Feb. 8, according to data released on Thursday by Enterprise Singapore.
Source: Reuters