Asia gasoline crack climbs to 13-month high as outlook improves

02 Apr, 2021

SINGAPORE: Asia’s gasoline crack climbed on Thursday for a fourth straight session, climbing to a more than 13-month high as sentiment was bolstered on signs of improving fuel demand and by regional refinery outages, trade sources said.

Sentiment has also been supported by regional refinery turnarounds and shrinking Singapore inventories, which hit an eight-week low in the week ended March 24.

The gasoline crack climbed to $7.17 a barrel on Wednesday, up from $7.12 in the previous session and its highest since Feb. 14, 2020.

It has risen steadily over the past three sessions, up from $5.81 a barrel at the start of the month and $3.87 a barrel at the beginning of February.

Gasoline stocks in the United States fell by 1.7 million barrels, compared with analysts’ expectations for a 730,000-barrel gain, the Energy Information Administration (EIA) said on Wednesday.

Gasoline demand in January was 12.5% below year-ago levels at 7.67 million bpd in the week ended March 26, a sharper decline than the 12.4% fall seen in December, according to a separate monthly report from the EIA on Thursday.

Asia’s naphtha crack slipped to $98.15 a tonne on Thursday, down from $98.45 a tonne in the previous session.

The naphtha market was pressured this week amid fading concerns over lasting supply disruptions eased following the reopening of the Suez Canal on Tuesday.

The naphtha crack hit a near two-week high of $108.90 per tonne on Friday.

The front-month naphtha arbitrage spread was unchanged on Thursday, holding at Wednesday’s two-week low of $13.75 a tone, Refinitiv data in Eikon showed.

Indonesia’s state oil company PT Pertamina said it has put out a fire that had engulfed part of its 125,000 barrel per day refinery in Balongan, West Java and had begun making preparations to restart the plant.

Japan’s biggest refiner Eneos Corp shut the 127,500 barrels-per-day crude distillation unit (CDU) and the remaining units at its Wakayama refinery on Monday due to a failure of compressed air equipment and a fire at a building of an air supply device, a company spokeswoman said on Tuesday.

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