Asia’s naphtha refining margins jumped to their highest in three months on Friday, ending the week higher as firmer demand prospects for the petrochemical feedstock and weaker crude oil prices supported the market.
The crack (NAF-SIN-CRK) surged $15.23 from the previous day to $110.18, as the backwardation between the second-half March and April contracts widened by $2.25. The margins gained 21.21% on the week.
Though Asian petrochemical margins have yet to give clear direction following the imposition of 10% tariffs on Chinese goods by the U.S., missing petrochemicals from the U.S. into China should be broadly supportive for Asian steam crackers, market intelligence firm Sparta Commodities said in a note.
In the gasoline market, the cracking margins (GL92-SIN-CRK) gained $1.54 from a day earlier to $8.79, rising for the second consecutive week amid steady trading activity this week. The crack posted a week-on-week gain of 8.79%.
INVENTORIES
Gasoline stocks at the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rose by 3.5% in the week to Feb. 6, extend a record-high at 1.69 million tons on slow exports, data from Dutch consultancy Insights Global showed.
Naphtha inventories were down by 6.5% to 459,000 tons in the same week, the data showed.
NEWS
Oil prices rose on Friday after new sanctions were imposed on Iran’s crude exports but were on track for a third straight week of decline, hurt by U.S. President Donald Trump’s renewed trade war on China and threats of tariffs on other countries.
Oil and gas traders are likely to seek waivers from Beijing over tariffs that the Chinese government plans to impose on U.S. crude and liquefied natural gas (LNG) imports from Feb. 10, trade sources said on Thursday.
The U.S. Treasury said on Thursday it is imposing new sanctions on a few individuals and tankers helping to ship millions of barrels of Iranian crude oil per year to China, in an incremental move to boost pressure on Tehran.
Growth in oil output from the U.S. Permian basin, the country’s top oilfield, is expected to slow by at least 25% this year despite President Donald Trump’s vow to maximize production, energy executives forecast on Thursday.
Oil executives called on Thursday for a return to navigation through the Red Sea en route to the Suez Canal following a halt in attacks by Iran-backed Houthi rebels but said firms were cautiously monitoring shipping conditions and competitors.
SINGAPORE CASH DEALS
Two naphtha trades, two octane-92 gasoline trades, and one octane-92 gasoline trade.
Source: Reuters