Asian naphtha crack hits two-month low

Asia's naphtha crack extended losses and hovered near a two-month low for the second day at $73.38 a tonne on Tuesday as supplies were expected to increase in July versus June. More supplies coming through to Asia from the West including Europe and the Mediterranean have eroded premiums, although levels were still leaning on the high side.
South Korea's Hanwha Total had on Monday paid premiums of about $16 to $17 a tonne to Japan quotes on a cost-and-freight (C&F) basis for slightly under 150,000 tonnes of heavy full-range naphtha scheduled for first-half August delivery. In India, Bharat Petroleum Corp Ltd (BPCL) sold up to 40,000 tonnes of naphtha to Petro-Diamond for July 4-5 loading from Kochi at a premium of about $24 a tonne to its own price formula on a free-on-board (FOB) basis.
This was down from the $36 a tonne premium BPCL had received for a June cargo sold to Gunvor but the level was still higher versus the premium received for a cargo sold also to Gunvor for early May loading from the same port. Kuwait Petroleum Corp offered a 25,000-tonne heavy full naphtha cargo but the results were not known.
It had previously sold two cargoes for first-half July loading to a trader at premiums of $19 to $20 a tonne to Middle East quotes on a FOB basis. In total, Kuwait had offered at least 75,000 tonnes of naphtha in the spot market for July loading, similar to volumes offered for June loading but lower than May quantities at more than 120,000 tonnes. Asia's gasoline crack to Brent oil hit a 22-month low of $4.50 a barrel as high crude prices at over $74 and ample petrol supplies weighed.
Expectations of gasoline stocks in the US being lower last week compared to a week before that failed to counter the bearish sentiment. A preliminary Reuters poll on Monday showed analysts had forecast a 500,000 barrels drop in US gasoline inventories. Vietnam's Petrolimex had in last week bought 12,000 tonnes of 92-octane grade gasoline for June 12-16 loading from Singapore at premiums of 60 cents a barrel to Singapore quotes on a FOB basis.