Naphtha cracks NAF-SIN-CRK and prompt-month prices NAF-1H-TYO slipped slightly, reflecting some weakness from petrochemical production margins while the emergence of February buying interest limited declines.
Some sporadic demand for light naphtha from northeast Asia supported the market, given the uncertainty in delays for alternative feedstock liquified petroleum gas (LPG) for early 2024 deliveries – though slots for January have risen, according to some shipbrokering sources.
“The recent uncertainty around the Panama Canal has caused potential voyages with marginal econs to avoid the canal and choose other regional voyage options,” said Sparta Commodities’ analyst Michael Ryan.
Demand for heavy and full-range naphtha was also evident, supporting prompt prices.
However, run rates across the region remain varied – with this trend likely to continue into January – and that capped overall buying activities. A decline in run rate is expected by some traders owing to squeezed margins for petrochemicals production, with term settlements for these products in 2024 lower year on year. For now, South Korean naphtha crackers were running at nearly 90%, while the remaining still keeping 70-80% operating ratios.
Cautious outlooks reflected the wide differentials of $40-50 per metric ton between swap prices and physical spot prices for February and March.
On the gasoline front, activity remained thin in the physical fixed-price market, and some market players are expecting this situation to continue until after the holidays.
Discussions were mostly on a floating-priced basis, as evidenced by the lack of bids and offers.
Fluctuations could be minimal in the near-term since there is also a lack of direction, one refinery source said.
Cracks GL92-SIN-CRK were little changed day on day, hovering at around $11 a barrel at the close of the session.
SINGAPORE CASH DEALS O/AS
– One gasoline deal, no naphtha deals.
NEWS
– Oil prices were little changed on Tuesday as investors eyed the impact on oil supply after attacks by Yemen’s Iran-aligned Houthi militants on ships in the Red Sea disrupted maritime trade and forced companies to reroute vessels.
– Russia’s Baltic port of Primorsk resumed loadings on Tuesday after scheduled maintenance closed the terminal for five days, two traders said and LSEG data showed.
– Several container ships are anchored in the Red Sea, and others have turned off tracking systems as traders adjust routes and prices in response to maritime attacks by Yemen’s Iran-aligned Houthis on the world’s main East-West trade route.
INVENTORIES
– Analysts in a Reuters poll estimated stockpiles of gasoline USOILG=ECI were up by about 1.7 million barrels last week, and distillate stockpiles USOILD=ECI, which include diesel and heating oil, were seen increasing by about 1 million barrels.
Source: Reuters (Reporting by Trixie Yap; Editing by Tasim Zahid)