Outright Asian oil swaps were generally higher on Thursday, lifted by stronger crude oil prices, but front-month naphtha swaps slipped on profit taking. Front-month gas oil swaps rose $1.30 to $110 a barrel by mid-session, their highest level in nearly five weeks.
Gas oil's crack strengthened to a four-week high on strong demand from China and Pakistan, coupled with tightening supplies in the Middle East, said traders. Gas oil's January crack spread versus Dubai widened 56 cents to $21.73 a barrel by mid-session. The regrade remained at a 10-week low in part due to stronger gas oil prices and ample stocks in Japan caused by a milder-than-expected winter.
January fuel oil swaps rose $4.50 to $495 a tonne by mid-session, but the crack spread eased as supplies swelled in the Middle East, said traders. The January crack spread against Dubai weakened 11 cents to minus $12.19 a barrel by mid-session as concerns emerged over the supply abundance in the Fujairah bunkers market.
January naphtha swaps edged down 15 cents to $93.55 a barrel by mid-session, while the January/February backwardation narrowed 25 cents to 15 cents. "Seems prices have slipped on some minor profit taking," said a broker. The ICE Brent/naphtha crack for first-half February eased to around $168 a barrel, reflecting easing concerns over supply flows in January.