Spot premiums had shot to $30 a tonne to Japan quotes on a cost-and-freight (C&F) basis, sharply contrasting the discount levels between June and first-half September.
But petrochemical prices such as those for ethylene were not catching up, the sources added. Petrochemical margins have been severely hit and there were concerns that this could hamper naphtha demand.
Additionally, buyers who are able to use alternative liquefied petroleum gas (LPG) to partially replace naphtha will likely continue to do so into the winter months. LPG typically becomes more expensive during winter because it is also a fuel used for heating.
"But given the naphtha prices now, it is cheaper to use LPG in December," said one of the sources. Asia's gasoline crack fell to a two-week low of $8.60 a barrel on high stockpiles.
Singapore's onshore light distillates stocks, which comprise mostly gasoline and blending components for petrol, surged nearly 12% or 1.17 million barrels to hit a five-week high of 10.934 million barrels in the week ended Wednesday, data from Enterprise Singapore showed.