Asia’s gasoline refining profit margin gained about 7% this week amid draws in U.S. and European stocks, but the upside was limited due to a large build in Singapore inventories.

The crack traded at $8.70 per barrel over Brent crude on Friday. At the deals window, activity remained tepid for a second straight day.

“With demand strengthening in the U.S. and supply remaining ample in Asia, gasoline flows on this route should remain elevated into the second quarter, further tightening U.S. West Coast balances while supporting freight and arbitrage incentives,” energy consultancy Kpler said in a report.

The naphtha market continued to trade in a steep backwardation of $22.25 per ton indicating tight supplies. The refining profit margin for naphtha traded at $114.88 per metric ton over Brent crude on Friday, down about 5% this week.

New U.S. sanctions on Iran’s oil exports added to supply jitters in the market, market participants said.

In tenders, South Korean buyers sought May naphtha, while Indian Oil was heard offering 70,000 tons of naphtha for April, they added.

INVENTORIES

Gasoline stocks at the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell by over 5% to 1.4 million tons in the week to March 20, data from Dutch consultancy Insights Global showed.

Naphtha stocks declined by 15% on the week to 369,000 tons, owing to higher inland petrochemicals demand.

NEWS

– Oil prices rose on Friday and were heading for a second consecutive weekly gain as fresh U.S. sanctions on Iran and the latest output plan from the OPEC+ producer group raised expectations of tighter supply.

– OPEC+ on Thursday issued a new schedule for seven member nations to make further oil output cuts to compensate for pumping above agreed levels, which will more than overtake the monthly production hikes the group plans to introduce next month.
Source: Reuters