Asia’s naphtha refining profit margin snapped a four-day winning streak on Wednesday after inventories at the commercial hub of Fujairah rose to a five-week high.

The crack fell by $2.45 to minus $15.58 a metric ton over Brent crude and the second-half August naphtha traded 75 cents higher than the following month in backwardation price structure.

Strong buying activity in the spot market last week boosted naphtha cracks in the last four sessions. South Korean players like LG Chem and Hanwha Total bought August naphtha. Meanwhile, India’s BPCL offered prompt 35,000 tons of naphtha for this month on Tuesday, market sources said.

The gasoline crack, on the other hand, rose to $11.49 a barrel over Brent crude from $10.75 a barrel in the previous session.

At the physical window, energy trader Unipec bought 100,000 barrels of benchmark-grade of gasoline. There were no deals for naphtha.

INVENTORIES

Light distillate stocks at the key trading hub of Fujairah rose by 1.433 million barrels to 7.664 million barrels in the week to July 10, S&P Global Commodity Insights data showed.

U.S. gasoline inventories rose by about 1 million barrels, market sources said.

NEWS

– Russia’s gasoline exports rose in January to June despite the introduction of the European Union’s embargo, thanks to healthy supplies of the fuel to Africa and Asia, data from market sources showed and traders said on Tuesday.

– Russian offline primary oil refining capacity is seen rising by 40% in August from July to 3.601 million tons, Reuters calculations showed on Wednesday, further complicating Russia’s efforts to cut oil exports.

– Indonesia’s coast guard said on Tuesday it seized an Iranian-flagged supertanker suspected of involvement in the illegal transshipment of crude oil and vowed to toughen maritime patrols.
Source: Reuters (Reporting by Mohi Narayan)