The Asian naphtha crack weakened for the third straight session to a more than one-month low of $68.05 a tonne on the back of softer petrochemical prices and weak end-user demand, traders said on Monday. "Crude came off a lot and petrochemical prices have also dropped," said a Singapore-based naphtha trader.
Oil prices hit their lowest since early 2009 on Monday, tracking a slump in Chinese equities, which fell nearly 9 percent in what was their worst performance since the depths of the global financial crisis in 2009. The weak demand on the end-user segment had offset the impact of fewer arbitrage barrels.
"We are expecting less arbitrage volumes coming into this region over September and up till first-half October, so the market should be tighter soon," the trader added. Bids for propane and liquefied petroleum gas eased $4 a tonne each to $388 a tonne and $403 a tonne on Monday, data from brokers showed.
GASOLINE SLIPS The 92-octane gasoline crack fell to a 3-1/2 month low of $12.74 a barrel on Monday in the absence of continued buying from Shell, providing scant support to the fuel amid a slump in the crude market. A fire which broke out at Royal Dutch Shell's 500,000 barrels-per-day refinery on Pulau Bukom island off Singapore on Friday occurred at a section of one of the units currently under scheduled maintenance, a company spokeswoman said on Saturday.
In line with a more bearish sentiment ahead, the global oil products market is expected to swing to a surplus of gasoline by as early as 2017, putting pressure on refiners who are currently struggling to meet demand, oil consultancy Wood Mackenzie said on Monday. Demand growth is set to slow due to increased efficiency and alternative fuel sources, while new refineries in the Middle East and the stabilisation of operations in Venezuela could bring a prolonged period of oversupply, Woodmac said.
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