Asia’s naphtha markets gathered steam this week, posting gains of about 32% and mirroring Northwest Europe markets, as global supply tightened while traders avoided Russian-origin cargoes and arrivals from the West dwindled.

The crack climbed by $10.70 to $101.63 a tonne on Friday and the backwardation widened to highest in nearly 11 months to $20 per tonne.

A total of 50,000 tonnes of naphtha for first-half April and May loading changed hands in physical markets.

Analysts and traders said the markets are waiting for more clarity on regulations around price cap on Russian naphtha.

“Russia will have little difficulty re-routing its lower quality products such as naphtha, gasoline, and fuel oils but the real demand for Russian diesel is in Europe, so Russia would need to find new markets and/or ways to blend its products, J.P.Morgan analysts said in a note on Friday.

INVENTORIES

Naphtha stocks at the Amsterdam-Rotterdam-Antwerp (ARA) commercial hub plunged to 244,000 tonnes in the week ended Feb. 16, Insights Global data showed, while gasoline stocks were stable at 1.436 million tonnes.

NEWS

Japanese oil refiner Idemitsu Kosan Co 5019 has shut the 150,000 barrel-per-day (bpd) crude distillation unit (CDU) at its Hokkaido refinery in northern Japan on Feb. 14 due to system trouble, a company spokesperson said on Friday.

China is expected to import a record amount of crude oil in 2023 due to increased demand for fuel as people travel more following the dismantling of COVID-19 controls and as a result of new refineries coming onstream, analysts said.
Source: Reuters