Asian gasoline, naphtha cracks slip despite weaker crude

Weaker crude oil prices failed to prop up Asia's benchmark gasoline and naphtha cracks against Brent crude on Tuesday as a persistent supply glut of the light distillate fuels continued to weigh on sentiment. The Singapore 92 RON gasoline crack against Brent crude slipped to a four-session low of minus $1.10 a barrel, down from minus $0.87 a barrel on Monday.
The naphtha crack slipped to a two-session low of $37.25 a tonne, down from $39.95 a tonne in the previous session. Oil prices were under pressure on Tuesday amid worries over global stock markets and doubts that planned output cuts led by producer club Organisation of the Petroleum Exporting Countries (Opec) will be enough to rein in oversupply.
Pakistan's PSO is seeking to import a total of 92,500 tonnes of gasoline for delivery through February. In the first batch, PSO is seeking 45,000 tonnes of 92 RON gasoline for delivery over February 1-21 into Karachi in a tender closing on December 27 with validity until January 3. In a second batch due for delivery over February 22-28 into Karachi, PSO is seeking a similar 92 RON cargo along with 2,500 tonnes of 97 RON gasoline in a tender that closes on January 15, with validity until January 22.
South Korea's Hanwha Total Petrochemical bought three 25,000-tonne cargoes of heavy full-range naphtha for delivery into Daesan in the second-half of January at a discount of about $4 per tonne to Japan quotes on a CFR basis. China will be implementing National VI standard for gasoline and gasoil nationwide from January 1, 2019, said research consultancy FGE in a note seen on Tuesday.
Fuel produced under China's National Six standard, equivalent to Euro V, has a sulphur content less than 10 ppm, compared with China's National Five standard that allows a sulphur content of 1000 to 2000 ppm. "Alkylates should be favoured over other gasoline blendstocks for the production of National VI gasoline due to its low aromatics content," said FGE. "With total alkylation capacity exceeding estimated demand, China appears well prepared to meet the nation-wide implementation of National VI next year," said FGE.