SINGAPORE: Asia’s naphtha crack extended losses to a fourth straight session on Tuesday, dropping to a near four-month low of $86.18 a tonne, down from $91.63 a tonne in the previous session and $101.25 a tonne at the start of last week.
The demand outlook for naphtha has weakened amid refinery turnarounds in North Asia as steam crackers are taken offline.
Weaker European naphtha markets also weighed on prices in Asia.
Asia’s gasoline crack was also lower on Tuesday, down 10 cents from the previous session to $6.42 a barrel, due to signs of rising supplies and a spike in coronavirus cases in some Asian countries, including Thailand and India.
“Following impressive strengthening in global gasoline cracks over the past few weeks, we are now starting to see them coming off their recent highs,” said JBC Energy in a note on Tuesday.
“The pressure has come on the heels of returning production both in terms of higher yields and higher runs, reducing the tightness in global balances we saw following the Big Freeze-related refinery shut-ins,” said the Vienna-based research consultancy.
“While global gasoline demand continues to regain lost ground, in our April forecast it is still lagging 2019 levels by some 1.5 million barrels per day,” said JBC.
“Going forward, we see a lengthening global market as refiners in Asia and Europe come back from maintenance and US refiners continue to increase runs, temporarily outpacing the expected demand return.”
China’s crude oil imports jumped 21% in March from a low base of comparison a year earlier as refiners ramped up operations amid robust fuel demand post-COVID-19, although purchases slowed ahead of the maintenance season.
The world’s top crude oil buyer imported 49.66 million tonnes last month, equivalent to 11.69 million barrels per day (bpd), data from the General Administration of Customs showed on Tuesday.
China’s refined oil product exports for March rose 28.9% from February to 6.83 million tonnes, but was still down from 7.26 million tonnes a year ago. Fuel exports in the first quarter reached 17.79 million tonnes, down 1.2% on year.
Hengyi has offered 33,000 tonnes of 88 RON gasoline loading from Brunei over May 2-24.
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