Asia’s naphtha margins on Wednesday climbed to a week’s high, boosted by improved demand due to the restarting of several regional crackers.

The crack rose by $2.24 to reach $110.68 per metric ton over Brent crude, its highest since Oct. 15.

Traders shared that in China, two crackers each with a capacity of 1.2 million metric tons (mt) per year, are expected to commence commercial operations in the next quarter. An additional two ethylene production crackers with a capacity of over 3 million mt/year is expected to come online in China, in the next quarter.

In gasoline, the margins dipped to $4.09 for the third consecutive session as demand sentiment remains bearish in the short-term, though losses could be capped by reduced run rates in refineries.

INVENTORIES

Light distillate stocks, including naphtha and gasoline, at the Fujairah commercial hub rose by 422,000 barrels to 6.001 million barrels in the week ending Oct. 21, S&P Global Commodity Insights data showed.

U.S. gasoline stocks fell by 2.02 million barrels, and distillate stocks fell by 1.48 million barrels in the week ending Oct. 18, according to market sources citing the American Petroleum Institute.

NEWS

Oil prices fell on Wednesday after industry data showed U.S. crude inventories swelled more than expected, though declines were capped as the market watched diplomatic efforts in the Middle East. Brent LCOc1 crude futures eased 50 cents, or 0.7%, to $75.54 a barrel. U.S. West Texas Intermediate crude futures CLc1 shed 50 cents, or 0.7%, to $71.24 a barrel.

China’s latest stimulus measures will not meaningfully boost domestic demand, leaving a major source of trade friction intact, U.S. Treasury Secretary Janet Yellen and International Monetary Fund chief economist Pierre-Olivier Gourinchas said on Tuesday.

SINGAPORE CASH DEALS O/AS

One gasoline deal and one naphtha trade.
Source: Reuters (Reporting by Haridas; Editing by Shailesh Kuber)