Asia’s naphtha refining profit extended gains on Monday amid a drop in supply from Russia in recent weeks, although the demand from petrochemical units remained tepid.

The crack rose by about $4 to minus $20.98 a ton over Brent crude in backwardation price structure. The second-half August naphtha price traded $1 per ton higher the following month.

Naphtha arrivals to Asia dropped to about 1 million tons in June from 1.3 million tons in May, ship-tracking data from Kpler showed, reflecting refinery turnarounds.

“The supply drop started to become more visible in recent weeks when some Asian buyers cancelled tenders for August delivery, citing premium mismatches,” consultancy Energy Aspects said in a note.

The gasoline crack, on the other hand, rose to $8.45 a barrel over Brent crude on Monday.

At the deals window, 200,000 barrels of motor fuel changed hands. Vitol and Unipec bought 50,000 barrels each of benchmark grade of the fuel, while Vitol also bought 100,000 barrels of the higher 95-octane grade of gasoline.

NEWS

Russia will put on hold more 38% of its primary oil refining capacity in July than originally expected, complicating the task of promised oil exports cuts, according to data from industry sources and Reuters calculations.

QatarEnergy and United Arab Emirates’ National Oil Company (ENOC) Group agreed a ten-year deal to supply condensate, a natural gas byproduct, QatarEnergy said on Monday.
Source: Reuters (Reporting by Mohi Narayan; Editing by Shweta Agarwal)