Asia’s naphtha refining profit margin edged slightly up on Monday as crude oil benchmarks eased but continued to trade in the red as petrochemical margins took a beating amid supply glut and poor demand in China.

The crack rose to minus $4.73 a tonne over Brent crude, compared with minus $14.35 in Friday’s session.

In another bearish signal to the market, naphtha supplies from Russia to Asia continued to rise bypassing Europe, even as arbitrage window has remained closed.

Russian naphtha flows to the Arab Gulf and Asia hit a record and those levels are likely to be sustained through at least end of the year, given the few alternative outlets that can absorb this supply, consultancy Energy Aspects said in a note.

Meanwhile, the gasoline crack jumped to about $15 a barrel over Brent crude amid healthy demand in India.

In physical markets, energy trader Unipec bought 50,000 barrels of benchmark-grade of gasoline.

TENDERS

Indian Oil sold 35,000 tonnes of naphtha to South Korea’s SK Energy for loading from Chennai during June 28-30, market participants said.

Qatar Energy sold combination of full range and light naphtha for July-Sept. period at a premium of $22 per tonne, they added.

NEWS

– China’s Unipec, the trading arm of top Asian refiner Sinopec, has emerged as a major seller of August-loading Oman crude this month, a move that has helped to cap benchmark prices despite Saudi Arabia’s plans to cut output next month.

– Oil prices fell $2 on Monday ahead of a U.S. Federal Reserve meeting as investors tried to gauge the central bank’s appetite for further rate hikes, while concerns about China’s fuel demand growth and rising Russian crude supply weighed on the market.
Source: Reuters