Asia's naphtha crack rose for the second day to reach a three-session high of $53.35 a tonne, supported by weaker Brent crude. High supplies due to refiners in parts of Asia maximising run rates and high exports from the Middle East to Asia have persistently offset demand from North Asia, causing the intermonth contango to widen.
Contango reflects an oversupplied market and it is usually measured by front-month prices falling short of those in the following months. Asia's naphtha price for front-month second-half August was $2 a tonne lower than second-half September on Friday compared to $1 lower in the previous session.
Japanese Mitsubishi Chemical and Idemitsu Kosan were looking to buy naphtha for first-half September and second-half August delivery respectively. The results were not immediately clear but traders estimated that Mitsubishi may have paid a discount of $2 to $3 a tonne to Japan quotes on a cost-and-freight (C&F) basis.
South Korea's SK Energy had in this week sold a spot naphtha cargo to an Asian buyer for August 13-15 loading at a discount of $6 to $7 a tonne to Japan quotes on a free-on-board (FOB) basis. Asia's gasoline crack was at a four-week high of $10.33 a barrel. Gasoline stocks held independently at the Amsterdam-Rotterdam-Antwerp (ARA) storage hub dropped 4.5 percent in the week to Thursday to their lowest level since November 2016, according to data from Dutch consultancy PJK International. This was in line with a fall in Singapore onshore light distillates stocks in the week to July 5, official data showed.
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