Asia's naphtha crack rose for a second day on Thursday to reach a near two-month high of $87.55 a tonne as recent demand helped ease some of the previous excess supplies woes. Fewer cargoes arriving in Asia this month compared to January and February from the West, including Europe, have also helped cut the recent high stockpiles, traders said.
Buyers this week include South Korea's Lotte Chemical and Taiwan's Formosa Petrochemical. Lotte Chemical had made its purchase on Wednesday. Formosa's tender on the other remained valid until Friday. Traders said the Taiwanese buyer's price would be at least $3 a tonne premium or above given the tighter supply now compared to February when Formosa paid a discount for a cargo delivering in first-half April.
A Chinese buyer was also seen buying a naphtha cargo this week for April delivery at premiums above $10 a tonne to Japan quotes on a cost-and-freight (C&F), traders said. Asia's gasoline crack was at a four-session high of $7.74 a barrel but supplies in Singapore were seen high, although US demand has picked up.
Singapore's light distillates stocks, which comprise mostly of gasoline and blending components for petrol, edged up 2 percent or 293,000 barrels to reach nearly a 3-1/2 month high of 14.87 million barrels in the week to March 14, official data showed. About 36,300 tonnes of gasoline was shipped to Mexico from Singapore, the data showed, making this likely the first petrol cargo plying between the two destinations so far this year.
Mexico was pulling gasoline from Singapore between August and September after supplies from the United States were disrupted following tropical storms. The rise in light distillate inventories contrasted the trend in the United States where its stocks fell by 6.3 million barrels last week, compared with analysts' expectations in a Reuters poll for a 1.2 million barrel drop.
Gasoline demand in the United States was at its highest level since August 2017, the US Energy Information Administration said. US largest refinery Motiva Enterprises has completed a planned overhaul of some of units at its 603,000 barrels-per-day (bpd) Port Arthur refinery in Texas on Wednesday.