Asia’s naphtha markets gained about 11% this week on the back of expectations of recovery in cracker demand in July and healthy spot activity.

The refining profit margin for naphtha fell to $75.58 per metric ton over Brent crude on Friday, compared with $81.45 a ton a day earlier. Backwardation was steady at $12 per ton.

In spot activity, Japan’s AMEC and Taiwan’s CPC were heard seeking 25,000 tons and 35,000 tons naphtha, respectively, for August delivery this week, market sources said.

South Korea’s YNCC bought 25,000 tons of naphtha for first-half-August delivery at low double-digit premiums, while QatarEnergy sold 75,000 tons of light naphtha at $44-$45 per ton, they added.

Meanwhile, the gasoline refining profit margin remained the weakest product across the barrel and posted a loss of about 18% at $4.61 per barrel over Brent crude amid a rise in inventories at key trading hubs.

NEWS

– Spain’s Repsol is in talks to merge its UK North Sea oil and gas business with private equity-backed NEO Energy, three industry sources said, the latest consolidation effort by companies that operate in the basin amid greater tax pressures.

– Oil prices will not change much in the second half of 2024 as concerns around demand from China and prospects of higher supply from key producers counter risks from geopolitical tensions, a Reuters poll indicated on Friday.

SINGAPORE CASH DEALS

Two gasoline trades, one naphtha deal.
Source: Reuters (Reporting by Mohi Narayan; Editing by Vijay Kishore)