Asian naphtha higher on tighter supply

Asia's naphtha open-specification front-month price for first half-May was $9.75 a tonne higher versus that for first-half June, up from the previous session and making this the widest inter-month spread since January 10. Squeezed supplies were pushing up spot premiums as seen in India's sales of naphtha cargoes in the previous session. Spot premiums for cargoes delivering to South Korea were also on the upward spiral, traders said.
LG Chem emerged to buy naphtha for first-half May delivery. The exact premium level could not be confirmed but traders said the petrochemical maker was seen paying $10 a tonne or above to Japan quotes on a cost-and-freight (C&F). This sharply contrasted the $2 a tonne premium LG Chem had paid on February 22 for cargoes scheduled for first-half April delivery. India's Mangalore Refinery and Petrochemicals Ltd (MRPL) sold 35,000 tonnes of naphtha for April 12-14 loading from New Mangalore at premiums of about $20.50 a tonne to Middle East quotes on a free-on-board (FOB) basis.
The buyer was Vitol, traders said. This was the highest premium level MRPL has fetched since it sold a cargo for first-half January loading. The current premium was also 78 percent higher versus MRPL's most recent sale of a March cargo. Oil and Natural Gas Corp also sold 35,000 tonnes of naphtha but for April 6-7 loading from Mumbai at premiums of about $18.50 a tonne to Middle East quotes on a FOB basis.
This was more than 2-1/2 times higher than ONGC's most recent sale of a March cargo. The buyer of ONGC cargo was Trafigura, traders added. The deals could not be directly confirmed as buyers and sellers do not typically comment on their trades. Asia's gasoline crack fell to $7.27 a barrel, lowest since February 23 on ample supplies. Singapore's onshore light distillates stocks, which comprise mostly gasoline and blending components for petrol, eased 1.9 percent or 284,000 barrels to reach a two-week low of 14.59 million barrels in the week to March 21, official data showed.
But despite the fall, the current stock levels were 8.7 percent higher versus a year ago. US gasoline stocks were also lower, having fallen 1.7 million barrels last week compared with analysts' expectations in a Reuters poll for a 2.0 million-barrel drop. But the US refiners are operating at nearly 92 percent of capacity, a 20-year high for this time of year, according to US Energy Department data.
Gasoline inventories in the Gulf Coast are near their highest in more than a year. Japan was also grappling with high inventories, with its gasoline stocks having reached a five-week high of 10.77 million barrels. Two workers were injured during maintenance on the Hycon plant at Shell's 404,000-barrels-per-day Pernis oil refinery in the Netherlands on Wednesday, a spokesman said.