Asia’s naphtha refining profit margin declined on Thursday amid a quiet window and an increasing focus on U.S. trade policy as the 90-day pause on higher tariffs ends on July 9.
The crack fell to $69.98 per metric ton over Brent crude from $73.10 a day earlier.
The U.S. cleared the way to resume ethane exports to China on Wednesday, sending letters to producers Enterprise Products Partners EPD and Energy Transfer ET rescinding a restrictive license requirement put in place just weeks ago.
“This is a relief and our imports will be resuming as usual,” a source at SP Chemicals said. The company’s petrochemical complex in Jiangsu province in eastern China uses a feedstock mix of 75% ethane and 25% propane.
Ethane and propane are alternative feedstocks to naphtha used for making petrochemicals. Troubles in the import of both the feedstocks from the top supplier U.S. had lifted demand hopes for naphtha from flexible crackers.
The gasoline margin also declined on Thursday after U.S. gasoline stocks rose unexpectedly, although a decrease in Singapore inventories cushioned the fall.
INVENTORIES
U.S. gasoline stocks (USOILG=ECI) rose by 4.2 million barrels in the week to 232.1 million barrels, the EIA said, compared with expectations for a 236,000-barrel draw.
Singapore light distillate stocks fell by 957,000 barrels to 12.372 million barrels in the week to July 2, Enterprise Singapore data showed.
The city-state exported about 338,922 tons of gasoline in the week, with Vietnam and Indonesia as the top two destinations.
NEWS
– Oil prices fell on Thursday after gaining 3% in the previous session as investors are wary higher U.S. tariffs may be reinstated, which could cause lower fuel demand, and as major producers are expected to announce an output hike.
– Abu Dhabi National Oil Company (ADNOC) has restored most of the Murban crude oil supply going to equity holders in July after making a sharp cut earlier, multiple trade sources said on Thursday.
SINGAPORE CASH DEALS
One gasoline trade.
Source: Reuters