Asia spot trading liquidity improved for gasoline both on the buy-sell tenders front and in the open trading market, with sellers emerging for October-loading gasoline, as evidenced from the various sales tenders issued by a few refiners.
Some buyers also sought for October deliveries, in line with earlier expectations, for higher-octane gasoline.
The market is still tight for clean gasoline, one major refiner source said, adding there is still demand for blendstocks such as alkylated oil and reformates.
Gasoline cracks were supported at above $14 a barrel as a result, with some buying for higher octane cargoes in the open trading session as well.
This came despite possibly weaker demand in the West as the markets enter the post-driving season period.
Naphtha prices mostly trended in line with crude futures through the afternoon trading session, despite overall thin trading activity, cautious expectations of overall downstream runs going into October and strong reforming margins.
Cracking margins for the petrochemical feedstock were slightly above $33 a ton, up almost $10 a ton day on day.
At least one steam cracker in southeast Asia is planning to reduce runs slightly by around 5% in the next few weeks, in addition to some already shut earlier in northeast Asia and planned maintenance activities, as there is a lack of cheaper priced cargoes in the market, against a backdrop of squeezed production margins for olefins.
The lack of affordable cargoes was attributed to slightly lower inflows from both the West and Middle East.
Total naphtha flows into Asia for September have been tentatively projected at 5.5-6 million metric tons, decreasing with the previous month’s total of 6.5 million mt and falling under the year-to-date (YTD) monthly average of 6.17 million tons, LSEG analysts wrote in a client report.
However, the production spreads between naphtha and aromatics derivatives remained lucrative for some of the splitters and reformers to continue high run rates – which could limited naphtha demand weakness to a certain extent.
NEWS
– European oil refiners are set to have an autumn maintenance season less busy than usual, analysts and traders say, as they try to capture higher profit margins amid low fuel inventories and robust demand for gasoline and diesel.
– Brent crude futures held above $90 a barrel on Tuesday, with investors looking out for macroeconomic data that could indicate whether interest rates will rise further in the United States and Europe.
REFINERY NEWS REF/OUT
– Venezuela’s state-run oil company PDVSA has restarted its second largest refinery Cardon’s catalytic cracker, key for producing gasoline, after being out of service for five weeks due to an outage and lack of feedstock, sources close to operations said on Monday.
– Japan’s Cosmo Oil, a unit of Cosmo Energy Holdings 5021.T, shut down the 86,000 barrels-per-day (bpd) crude distillation unit (CDU) at the Yokkaichi refinery on Sept. 9 due to electrical system trouble, a company spokesperson said on Tuesday.
Source: Reuters (Reporting by Trixie Yap; Editing by Krishna Chandra Elu)