SINGAPORE: Asia’s naphtha crack hit a two-month high of $85.13 a tonne on Thursday as prompt supplies tightened on the back of firm demand and lower refinery throughput.

Naphtha market fundamentals turned in favour of the sellers this month, with spot prices rising to almost mid-teens a tonne to Japan quotes on a cost-and-freight (C&F) basis in South Korea this week versus discounts in November.

“Current naphtha fundamentals are strong due to demand but we are expecting a high number of arbitrage volumes arriving in Asia in January,” said Krystal Chung, senior analyst of Refinitiv Oil Research.

“The January arriving volumes could potentially be around 2.1 million tonnes,” Chung added.

Arbitrage volumes refer to naphtha arriving in Asia from Europe, the United States and the Mediterranean.

Asia’s gasoline crack rose to a three-session high of $2.55 a barrel but petrol remains under pressure due to ample supplies. Singapore light distillates inventories rose 287,000 barrels, or 2.3%, to a five-week high of 12.72 million barrels in the week to Dec. 16, data from Enterprise Singapore showed.

This was about 3.7% higher versus a year earlier.

Gasoline inventories in the United States were also higher, having risen by 1 million barrels last week to 238.9 million barrels, data from Energy Information Administration (EIA) showed.

China’s gasoline output at 11.74 million tonnes in November, on the other hand, was down 0.7% versus a year earlier, official data showed.