Asia’s naphtha margin over Brent crude oil extended gains on Monday and the contango widened for a third consecutive day but sentiment remained subdued amid poor petrochemical demand in the region, traders said.

The crack rose to $18 per tonne, compared with $16.30 per tonne in the previous session after posting a weekly loss of about 49%.

On Monday, the first-half July naphtha was 50 cents cheaper than the following month.

“As long as China doesn’t recover in a robust manner, demand will remain bad,” a Japan-based petrochemical trader told Reuters.

The gasoline crack also rose in anticipation of summer demand, although higher supplies within Asia kept a lid on the upside.

Asia’s reforming margin, or gasoline’s premium against naphtha, hovered near a one-month high at $25.17 a barrel.

In physical markets, there were no traders for both naphtha and gasoline.

NEWS

– The chairman of Indian Oil Corporation, the country’s top refiner by capacity, on Monday said he remained committed to term contracts with the Middle East but spot purchases from the region have fallen as more Russian crude has been imported.
– Oil prices were steady on Monday as caution relating to U.S. debt ceiling talks dragged on optimism over demand later in the year and offset support from lower supplies from Canada and OPEC+ producers.
Source: Reuters