Asia’s naphtha market gained on Wednesday after inventories in the Middle East declined to a three-week low and Panama Canal congestion led to lower flows of alternative feedstocks ethane and butane from the United States, traders said.

The crack NAF-SIN-CRK jumped by about $8 to $54.57 per metric ton over Brent crude and the first-half January naphtha traded $11 higher than the following month in backwardation structure, LSEG data showed.

Meanwhile, bad weather in the Black Sea has been affecting flows of cargoes from Russia to Asia, adding to the tightness caused by lower supplies from the top exporter region of the Middle East, market players said.

At the deals window, energy trader Gunvor bought 25,000 metric tons of naphtha for first-half February delivery for a second straight day. There were no trades for transport fuel for a third consecutive session this week.

The gasoline crack GL92-SIN-CRK traded steady at over $8 per barrel over Brent crude on Wednesday.

INVENTORIES

Light distillate stocks at the Fujairah commercial hub fell by 243,000 barrels to 5.237 million barrels in the week to Nov. 27, S&P Global Commodity Insights data showed.

NEWS

– Russia’s transport ministry said on Wednesday that weather conditions in the Black Sea remained unfavourable for shipping and that restrictions at Russian seaports would remain in place until the weather improved, disrupting oil exports.

– Delegates from nearly 200 countries will convene this week for the COP28 climate summit in Dubai, where conference host and OPEC member the UAE hopes to sell the vision of a low-carbon future that includes, not shuns, fossil fuels.
Source: Reuters (Reporting by Mohi Narayan; editing by Eileen Soreng)