Asian naphtha markets were supported by an uptick in Chinese demand following import tariffs on U.S. liquefied petroleum gas, an alternative feedstock for steam crackers, though worries on petchem demand fundamentals in the broader markets curbed gains.
Buying activities from Chinese importers were seemingly prevalent through the week, with a handful of buyers seeking for any May cargo.
Cracking margins for the petrochemical feedstock gained back to around $73 per metric ton, little changed week on week, erasing most of this week’s losses.
Gains in local petrochemical derivative prices were further supportive for China’s import buying, but some traders were cautious not to be overly bullish in the broader Asian markets.
Separately, South Korea’s YNCC cancelled a tender seeking second-half May cargoes owing to the unwillingness to accept higher offers, one of the sources said.
On the gasoline front, cracking margins (GL92-SIN-CRK) were generally on a downtrend for the week against a backdrop of cautious trading sentiment and slightly weaker performance for U.S. gasoline futures.
Cracks closed at $6.8 per barrel on Friday, compared with around $8.3 a barrel last week.
Despite the price weakness, some traders were still bullish on near-term supply fundamentals remaining supportive as swing barrels from India and the Middle East are still heading to the U.S. markets, in addition to limited China-origin exports for April, one trade source said.
However, price movements in the near-term will still be tracking the futures market closely and that could dampen a bit of the market’s mood, a second source said.
Meanwhile, South Korea’s GS Caltex offered two May cargoes loading — one for early May and one for around mid-May — via a tender that closes today with same-day validity.
SINGAPORE CASH DEALS
– Three gasoline deals, no naphtha deals
INVENTORIES
– Oil product stocks independently held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell by more than 3% on the week, data from Dutch consultancy Insights Global showed on Thursday.
REFINERY NEWS
– An oil refinery operated by Russian oil giant Rosneft ROSN in Komsomolsk-on-Amur in the country’s Far East region is producing at full capacity after a fire at the site was extinguished on Thursday, TASS news agency reported.
NEWS
– Saudi Arabia’s crude oil supply to China will surge in May from the prior month as a sharp price cut by the kingdom attracted more demand, sources said on Friday.
– Oil prices rose on Friday after settling more than $2 a barrel lower in the previous session, but were set to drop for a second straight week on concerns over a prolonged trade war between the United States and China.
– Beijing on Friday increased its tariffs on U.S. imports to 125%, hitting back against U.S. President Donald Trump’s decision to hike duties on Chinese goods to 145%, raising the stakes in a trade war that threatens to upend global supply chains.
– Venezuela’s state oil company PDVSA has canceled several authorizations it had granted U.S.-based producer Chevron CVX to load and export Venezuelan crude in April, three sources with knowledge of the decision said on Thursday.
Source: Reuters