SINGAPORE: Asia’s gasoline and naphtha margins improved on Friday on the back of a brighter economic outlook in the West, although extended lockdowns in Asia capped margin gains.

The gasoline refining margin rose to $8.87 a barrel on Friday, up from $8.14 in the previous session.

Lower inventory in Europe and the United States is also boosting prices in Asia, trade sources said.

Still, extended lockdowns in parts of the region are capping price gains, they said.

In Vietnam, for instance, fuel demand was down due to restricted transport movement in the south of the country, a source familiar with the matter said. In China and India, however, demand was improving, a second source added.

Meanwhile, Asia’s naphtha margin rose by nearly 4% to $127.53 a tonne.

Demand for the petrochemical feedstock is firm in Europe and Asia, a third source said, adding that naphtha demand as a gasoline blending component in Europe is also expected to increase in summer.

Still, expected higher refinery run rates in China could dampen demand, the source said.

Seven gasoline trades, no naphtha deals. Weekly US gasoline demand surged to a one-week record, but the four-week average of gasoline supplied was at 9.5 million barrels per day, the highest since October 2019, data from US Energy Information Administration showed. That helped lower gasoline stocks by 6.1 million barrels, exceeding expectations for a 2.2 million-barrel drop.

Gasoline stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage area dropped 4% in the week to Thursday, data from Dutch consultancy Insights Global showed.