Asia’s naphtha refining profit margin rebounded on Wednesday after underlying prices fell in tandem with weakness in crude oil benchmarks.

The crack jumped by about $5 to $81.45 per metric ton over Brent crude. The second-half January naphtha rice traded $14.50 per ton higher than the following month in backwardation structure.

In physical markets, energy trader Vitol bought 25,000 tons of naphtha from BP at $654 per ton, market players said. O/AS

Analysts and traders said the fluctuation in cracks is not supported by fundamentals in Asia and margins are solely driven by movement in crude prices.

“We do not think that the upward movement has much to do with fundamentals. Note also that ethylene margins remain weak in all three (Asia, Europe and U.S.) regions, at levels that effectively halt them from increasing petchem runs,” energy consultancy FGE said in a note.

INVENTORIES

Light distillate stocks declined by 458,000 barrels to 4.779 million barrels in the week to Dec. 4, S&P Global Commodity Insights data showed.

NEWS

– U.S. gasoline prices are the lowest they have been since January and by Christmas could fall below $3 a gallon for the first time since 2021, analysts said, which should boost consumer confidence during the holiday shopping season.

– Sinopec’s Qingdao Petrochemical plant has resumed operation after shutting down for two months of maintenance, the refinery said in a statement on social media.
Source: Reuters (Reporting by Mohi Narayan; Editing by Sohini Goswami)