NEW DELHI: Asia’s naphtha refining profit margin dropped once again on Monday, after briefly pausing last week, due to oversupply concerns amid poor demand, market sources said.
The crack dropped to minus $36.38 a tonne, down $11.98 from the Friday.
Naphtha margins have more than halved since the beginning of May after prices of rival feedstock liquefied petroleum gas (LPG) cooled off, eroding demand from swing crackers in the region.
Analysts at energy consultancy FGE expect a recovery in demand in the near term as China is gradually easing its restrictions and aims to return to normalcy by end-June, although a lot of uncertainty remains.
“Given the growing demand for diesel, jet fuel and gasoline, refiners are economically incentivised to continue running at maximum utilization naturally increasing naphtha output,” FGE said in a note.
Saudi Arabia, the world’s top oil exporter, raised July crude oil prices for Asian buyers to higher-than-expected levels amid concerns about tight supply and expectations of strong demand in summer.
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