Asian naphtha cracks fall to six-session low

Asia's naphtha crack fell to a six-session low of $60.98 a tonne as concerns over building supplies in Europe weighed on sentiment although demand in the East remained healthy, traders said on Thursday. Demand for European gasoline from West Africa and the United States has slowed considerably, resulting in supplies now being held in floating storage.
This has led to weak demand for naphtha, which depending on its grades, can be used as a blendstock of the motor fuel or as a petrochemical raw material. "Given the naphtha situation in Europe, there might be a need to push those barrels out of the region to Asia, which itself is struggling with sufficient cargoes for a while," said a Singapore-based industry source.
Current spot prices in South Korea, one of Asia's top naphtha importer by volume, eased to around parity around middle of February after struggling at discount levels since January 11 due to heavy supplies. "The weakness in the Asian naphtha market currently seems to be a reflection of the poor gasoline market and not related to the actual demand in the East because demand from the petrochemical sector is good," said another Singapore-based industry source. Other than South Korea which has been buying cargoes, Chinese Unipec and Malaysian-based Titan were also in the market seeking naphtha.
GASOLINE DOWN Asia's gasoline crack, similar to naphtha, was at a six-session low of $6.33 a barrel, with higher supplies seen in the Singapore oil hub. Singapore onshore light distillates stocks, which are comprised mostly of gasoline and gasoline blending components, rose 361,000 barrels or nearly 2.6 percent to reach a two-week high of 14.503 million barrels in the week to February 17, official data showed.
The data showed that China, South Korea and Taiwan had shipped some 342,000 tonnes of gasoline to Singapore. There were no shipments arriving in the week to February 11 in Singapore from South Korea and Taiwan, the data showed. There were more than eight offers against fewer than three bids, resulting in no cash deals in the Singapore market.