Asia's gasoline plunges; swap price turns negative

Asia's physical gasoline crack dived 57%, the largest single day drop since May 2019, to hit a near nine-month low of $2.29 a barrel on Friday as the global demand for petrol will take a beating due to the coronavirus crisis.

While the epidemic has passed its peak in China, many other countries are still battling the fast-spreading virus which has infected more than 127,000 people worldwide.

This has either led to lockdowns of cities or restricted travelling as people fear catching the virus.

While gasoline inventories in Europe and the United States were lower week-on-week, Singapore stockpiles were at an 11-month high.

The weak fundamentals had already driven the Northwest European gasoline refining margins into the negative zone on Thursday, hitting their lowest since February 2019.

Asia's prompt-month gasoline swap price - or the difference between March and April prices - hit a small discount on Friday for the first time since end January, data from Refinitiv Oil Research showed.

Petron Malaysia is looking to import gasoline for June 2020 to May 2021 through a tender closing on March 20 with offers to stay valid until April 23.

Asia's naphtha crack fell 6% from a 1-1/2 week high to end the week at a two-session low of $55.30 a tonne as demand tapers off.

Buyers from South Korea, Taiwan, Malaysia and Singapore locked in more than 230,000 tonnes of naphtha between March 9 and March 12 for second-half April delivery.

Although more than 200,000 tonnes of naphtha have to be diverted after Lotte Chemical said it was unable to digest 10 naphtha cargoes due to an explosion at its 1.1 million tonnes per year (tpy) cracker, traders said those volumes can find homes at least for this month.

Ongoing refinery maintenance in the Middle East has also helped cushioned the impact from the loss of demand in the short-term.

Come May, however, the tide could change as most refineries in the Middle East - Asia's top naphtha supplier - would have resumed operations.

But Saudi Aramco's largest refinery in Ras Tanura which has a capacity of 550,000 barrels per day will shut in June for an overhaul, after which it will stop exporting naphtha as it needs the fuel for a new reformer.