Asia’s naphtha refining profit margin rose for a second day on Wednesday after oil benchmarks weakened over interest rate fears, although the crack continued to trade in red over poor petrochemical demand.

The naphtha margin over Brent crude rose about $15 to minus $35.15 a metric ton. The first-half August naphtha traded $1.50 per ton higher than the following month. NAF-SIN-CRK

At the Singapore window, energy trading arm of Shell bought 25,000 tons of first-half September naphtha from BP.

A flurry of gasoline trades at the window lifted the gasoline crack to $12.38 a barrel over Brent crude.

In another bullish signal to markets, gasoline inventories fell about 2.9 million barrels, market sources said, compared with estimates for a draw of 126,000.

Singapore and Fujairah inventory data are due later on Wednesday. Singapore markets closed early on account of a public holiday on Thursday.

NEWS

– Oil prices edged higher on Wednesday after industry data showed a larger-than-expected drawdown of U.S. inventories signalling robust demand from the world’s biggest oil consumer, although interest rate-hike jitters limited the gains.

– Russia’s energy ministry said it sees no shortage of gasoline in the domestic market, with companies having cut their exports and increased production after gradually completing planned maintenance work.

– Brent crude futures slipped to a discount to Dubai quotes on Wednesday for the first time since November 2020, amid worries about looming interest rate hikes dampening growth and fuel demand in the U.S. and Europe, trade sources said.

SINGAPORE CASH DEALS O/AS

Eight gasoline trades, one naphtha deal.
Source: Reuters (Reporting by Mohi Narayan; Editing by Sherry Jacob-Phillips)