SINGAPORE: Asia's naphtha price extended losses on Wednesday, nearing a week's low but cracks surged to an almost three-week high, with intermonth spreads hitting a fresh high for this year on strong sentiment, thanks to Western demand.
"The market is definitely bull now," said a North Asian trader.
A strong draw on naphtha in the West and tension in Libya continued to bolster sellers' mood although some petrochemical makers were sidelined by the high premiums.
Two vessels loaded with naphtha have been booked by Petrobras to cross the Atlantic to Brazil as high ethanol prices drive motorists there to switch to gasoline at the pump.
A South Korean buyer decided against purchasing volumes on Wednesday citing high prices, but Japanese Mitsui Chemicals bought a first-half May cargo. Premiums were not immediately clear.
Some traders were unconvinced that supplies were tight.
"South Korean refiners have raised runs, and more spot is seen coming out, some of which has sold to Japan," said another trader.
Hyundai Oilbank sold a full-range naphtha cargo, which traders said most likely went to Mitsubishi Corp, while S-Oil was seen to have sold 32,000 tonnes for late May lifting from Onsan on Wednesday.
Gasoline cracks recovered to reach nearly a week high, but cash deals were at a standstill for the second straight day.
But in Vietnam, Petrolimex bought 144,000 tonnes of gasoline, or 100 percent of the volumes it had sought, for second-quarter delivery at prices ranging from discount of 10 cents a barrel to premiums of 10 cents a barrel to Singapore quotes on a free-on-board (FOB) basis.
Cargoes will be supplied from Singapore and China.
* SWAPS OUTRIGHTS (CFR Japan): April swaps fell $12.25 to $1031.00 a tonne, while that for May fell $12.50 to $1027.00.
* EAST-WEST SPREADS (The differential between CFR Japan swaps and Northwest Europe swaps): Asian swaps for April were priced $1.00 higher than in Northwest Europe, compared to $4.75 a tonne the previous day.
- May swaps in Asia were $8.25 a tonne higher than those in Northwest Europe compared to $10.00 a tonne on Tuesday.
* SWAPS TIME SPREADS (CFR Japan): April/May times spreads widened 25 cents to $4.00 a tonne premiums, while May/June spreads widened 75 cents to $4.25 a tonne.
* SWAPS CRACKS: Discounts for May crack spreads narrowed $1.65 to $6.91 a barrel to Brent crude.
* JAPAN OPEN-SPEC NAPHTHA: The price for front-month second-half May fell $9.50 to $1041 a tonne, lowest since April 7 at $1034.50.
* BACKWARDATION/CONTANGO: The intermonth backwardation between second-half May and second-half June widened $2.00 to $11.50 a tonne.
* CRACK SPREAD: Cracks -- the profits or losses of refining Brent crude into naphtha -- jumped $13.38 to $133.13 a tonne premium, highest since March 25 at $134.00 a tonne premium.
* NAPHTHA TENDERS: Kuwait offered 50,000 tonnes of full-range naphtha, and 24,000 tonnes of light grade for second-half May lifting in a tender that is due to be awarded on Friday.
* NAPHTHA CASH DEALS: Itochu bought a first-half June cargo from BP at $1034.00 a tonne.
* REFORMING MARGINS: Gasoline's premium to naphtha fell 42 cents to $11.68 a barrel.
* GASOLINE CRACKS: Cracks -- premiums/losses obtained from refining Brent crude into gasoline -- recovered 85 cents to $3.95 a barrel, highest since April 5 at $4.01 a barrel.
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