SINGAPORE: Asia’s gasoline crack fell on Thursday, extending losses from a more than one-week high on Tuesday after a surprise increase in US gasoline stocks added to concerns over rising COVID-19 infections in India and elsewhere.

Hopes that India’s deadly second wave was about to peak were swept away on Thursday as it posted record daily infections and deaths and as the virus spread from cities to villages across the world’s second-most populous nation.

The gasoline crack in Singapore slipped to $6.81 per barrel on Wednesday, compared to $7.09 per barrel in the previous session.

Still, industry participants remained optimistic that summer demand and increased vaccinations in western markets would increase consumption of the motor fuel.

“With a number of European countries easing domestic restrictions, mobility data show an increasing number of trips, now at par with pre-pandemic levels,” Citi Research said in a note on Wednesday.

As vaccines are further rolled out and a pent-up summer driving season continues to manifest, “this trend should accelerate, keeping demand for motor fuels robust and boosting market confidence in the recovery story,” the US bank said.

“The result should be record global transport fuel demand by August,” said Citi Research.

Light distillate inventories in the Singapore hub also fell to a more than six-month low in the week to May 5.

Asia’s naphtha crack also fell on Thursday, retreating from one-and-a-half-month high in the previous session

The naphtha crack climbed to $97.48 a tonne on Wednesday, up from $103.45 per tonne in the previous session and its highest since March 26.

Naphtha cracks have been supported by a lower near term supply outlook as the East-West (EW) arbitrage window fell amid tight European supplies.

The front-month East-West spread was at $11.50 a tonne on Thursday, up 50 cents from the previous session and slightly higher from a near a two-month low of $10.50 a tonne on Friday, Refinitiv data in Eikon showed.