NAPHTHA: Asia's naphtha remained trapped in a downward spiral as high supplies and weakening petrochemical margins sent the physical crack value to a 25-month low of $40.78 a tonne. Traders said concerns of shrinking petrochemical margins were directly impacting the naphtha feedstock market. Naphtha is a key feedstock for plastics.
Spot cargoes streaming out of the Middle East added to the bearish mood as demand so far has not been able to soak up the excess cargoes. Abu Dhabi National Oil Company offered 75,000 tonnes of naphtha early December loading through a tender expected to be awarded later this week.
ADNOC does not typically sell spot naphtha in the past but it has recently been offering cargoes in the spot market for September loading from Ruwais, followed by more offers for October, November and now December. Asia's gasoline crack, although not negative when measured against Brent, fell to a five-year low of $1.42 a barrel due also to high supplies. But refiners were not likely to reduce runs as demand for gasoil and jet fuel outweighs the weakness in light distillates, traders said.
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