Asia’s gasoline crack slips, naphtha under pressure as Brent rises

NEW DELHI: Asia’s gasoline crack extended losses on Tuesday after analysts predicted a build up in US inventories in the week to Sept. 27.

The crack weakened to $6.54 a barrel, hitting a two-week low, from $6.73 in the previous session. However, demand for the benchmark 92-octane grade stayed firm, lifting prices at the trading window.

There were two deals for the 92-octane gasoline in physical markets. Vitol and PTT purchased a cargo each for a third consecutive day.

Denting demand sentiment, analysts estimated that US stockpiles of gasoline rose about 1.2 million barrels last week.

Meanwhile, the naphtha crack in the region also weakened as crude oil prices crossed $80 a barrel on tighter supply.

The crack eased to $132.43 a tonne from $135.33 in the previous session.

On supply side, total naphtha flows into Asia for September are expected to close at a 16-month high of about 6.8 million metric tonnes (mt), assessments by Refinitiv Oil Research showed.

“Asian price benchmarks remain supported for now on signs of shrinking supply and firm demand. Import requirements have stayed strong on the back of healthy downstream olefins margins, while buyers have also been heavily dependent on naphtha as the sole feedstock as persistently high liquefied petroleum gas (LPG) prices largely prohibited the switch to the alternative feedstock,” Refinitiv said in a weekly report late Monday.

Oil markets rose for a sixth day on Tuesday, boosted by a tighter supply and firm demand outlook, but power shortages in China which hit factory output tempered the rally.

A lack of investment in new oil and gas supplies, amid a shift in focus to cleaner fuels, is likely to drive price volatility in the next decade as demand for traditional energy sources grows, senior industry executives said.