SINGAPORE: Asia’s naphtha crack climbed to a more than two-month high of $106.50 per tonne on Monday, its highest since March 26.
The naphtha crack has climbed for four straight sessions, buoyed by expectations of an improvement in near-term demand from South Korea and lower arbitrage supplies in June.
Total naphtha flows into Asia for June have been provisionally assessed at 5 to 5.5 million tonnes, according to Refinitiv Oil Research assessments released on Monday.
The volumes were sharply lower from a May forecast of 6.2 to 6.3 million tonnes and falling under the year-to-date monthly average of similar levels, the assessments showed.
Naphtha stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub dropped more than 30%, as demand in blending pools was strong, according to Dutch consultancy Insights Global.
Asia’s gasoline crack also firmed on Monday, as optimism over rising demand in the United States and Europe outweighed concerns of weak demand in Asia amid persistent coronavirus-led mobility restrictions.
The gasoline crack climbed 31 cents to a six-session high of $5.18 per barrel.
A recent resurgence of COVID-19 infections in Malaysia, Vietnam and Thailand and still elevated number of cases in key markets such India and Japan have dampened the outlook for transportation fuel demand in Asia.
China’s exports of refined products in May fell to 5.41 million tonnes, down by 21% from last month but were up by 39% from May last year, preliminary trade data from China’s General Administration of Customs showed. This came as China’s crude oil imports fell 15% in May from a high base a year earlier to 40.97 million tonnes, equivalent to 9.65 million barrels per day (bpd), the data showed, as maintenance at refineries limited refined fuel output.
About 1.2 million barrels per day (bpd) of China’s refining capacity was offline in May, up from 1 million bpd in April, according to Refinitiv analysts.
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