Asian naphtha eases; gasoline hits 2-1/2-month high

Asia's naphtha intermonth premium spread eased 50 cents to $14 a tonne on Wednesday, but this was still indicative of strong fundamentals versus three months ago when it was at $3.00. The intermonth premium is the difference between front-month first-half July price and first-half August price.
Strong fundamentals driven by tighter supplies in Asia have offset demand loss from cracker maintenance in Japan and Taiwan next month. Cargoes arriving next month in Asia from the West including Europe, for instance, are expected to hit a three-month low.
Middle Eastern supplies to Asia this month were also lower, at up to 2.7 million tonnes versus 2017 monthly average of 2.9 million tonnes, Thomson Reuters Oil Research team said in a weekly report. India's Oil & Natural Gas Corp (ONGC) has two outstanding tenders to sell a total of 65,000 tonnes of naphtha for first-half June loading.
Kuwait Petroleum Corp also has an outstanding tender to sell a total of 53,000 tonnes of naphtha, comprising light and full-range grades, for June-loading. Japanese ethylene production in April fell to 484,300 tonnes, the lowest since June 2017, official data showed
Cracker maintenance in Japan has affected production of ethylene and also crimped demand for naphtha, with official data showing that the country imported 732,010 tonnes of naphtha last month. This was the lowest monthly imports in many years and down 38 percent from the 2017 monthly average. Asia's gasoline crack surged to a 2-1/2-month high of $8.52 a barrel as summer demand could help soak up some of the excess supplies seen this year.
Analysts forecast that gasoline stockpiles in the United States have fallen by about 1.4 million barrels last week, an extended Reuters poll showed. Indonesia's Pertamina, also Asia's top gasoline importer, was looking to buy gasoline from the spot market through a tender closing on May 17 but offers were to stay valid until May 21. Japan's JXTG Nippon Oil & Energy shut its 136,000-bpd sole crude distillation unit (CDU) at the Oita refinery on Tuesday for a planned maintenance which would last until late June.