Asia's naphtha crack edged higher to a two-session high of $67.05 a tonne on Tuesday, but was still trading at a discount to Brent crude as supplies remained abundant, making it unprofitable to refiners. Naphtha arriving in Asia this month from the West including Europe and the Mediterranean are estimated at 1.5 to 1.6 million tonnes, Thomson Reuters Oil Research showed.
For two straight months this year, the monthly volumes have been higher than 2017's monthly average at about 1.2 million tonnes. Cargoes arriving this month from the Middle East were seen at 2.6 to 2.7 million tonnes, up slightly from January's volume at about 2.4 to 2.5 million tonne, the report said. Despite the weak fundamentals, Kuwait Petroleum Corp (KPC) managed to command a sharply higher premiums for is new one-year contract starting April versus a contract ending March 2018. KPC, traders said, has sealed its full-range grade and light grade for April 2018 to March 2019 loading at about $13 and $14.50 a tonne respectively.
This was sharply higher than the $7.75 a tonne premium and $9.25 a tonne premium it had fetched for April 2017 to March 2018 delivery. Asia's gasoline crack fell to a 2-1/2 week low of $7.69 a barrel as deals came to a standstill in the Singapore cash market following a recent buying spree by Singapore trader Hin Leong.
Six analysts polled ahead of inventory reports from industry group American Petroleum Institute (API) and the US Energy Department's Energy Information Administration (EIA) estimated that US gasoline stockpiles had risen 1.4 million barrels last week, a preliminary Reuters poll showed on Monday. Japan's JXTG Nippon Oil & Energy Corp restarted a 26,000-barrel-per-day (bpd) fluid catalytic cracking (FCC) unit at Oita refinery on Friday following an unplanned shutdown on January 16 because of a fire.