Asia’s gasoline margins extend gains despite rising stocks

SINGAPORE: Asia’s gasoline crack extended gains on Thursday, moving further away from a two-month low hit at the end of November.

The rise in motor fuel margins came despite higher crude oil prices and rising inventories across key storage and trading hubs. The gasoline crack rose to $8.79 a barrel, up from $7.87 a barrel in the previous session.

But its outlook was clouded by fears of renewed travel restrictions and rising near-term gasoline output.

Climbing oil prices on Thursday erased the previous day’s losses, with investors adjusting positions ahead of an OPEC+ decision on supply policy, though gains were capped by fears that the Omicron coronavirus variant could hit fuel demand.

Gasoline margins fell last month, giving up the sharp gains recorded in a October rally that sent them to a more than six-year high of $18.72 a barrel on Oct. 27 on the back of tightening supplies and signs of recovering demand. On Nov. 29, the gasoline margin fell to a two-month low of $6.71 a barrel.

Asia’s naphtha crack was largely steady on Thursday at $146.18 per tonne, down by 60 cents from the previous session.

While the naphtha crack has come under pressure from limited blending economics, limited arbitrage supplies and steady petrochemicals demand were expected to provide support.

Singapore’s light distillate inventories jumped 12% to their highest in six weeks of 12.28 million barrels in the week to Dec. 1, Enterprise Singapore data showed.

The inventories, which include gasoline and naphtha, were 1% higher than year-ago levels but were below the 2021 weekly average of 13.42 million barrels, the data showed.

The inventories gained despite higher gasoline exports and lower naphtha imports.

Singapore net exports of 90-97 RON gasoline climbed to 363,000 tonnes in the week to Dec. 1, compared with net exports of 102,000 tonnes the previous week. Net exports of gasoline below 90 RON were at 91,000 tonnes, compared with net exports of 67,000 tonnes in the previous week.

Meanwhile, net imports of naphtha reformates fell to 168,000 tonnes in the week to Dec. 1, down from 241,000 tonnes in the previous week. In the Unites States, gasoline stocks rose by 4 million barrels in the week, official data showed, much more than an expected gain of 29,000 barrels.