Asia's naphtha crack spread for front-month, first-half May was at $69.93 a tonne on Wednesday, making this the highest front-month value in nearly three weeks, Reuters data showed. Although demand for first-half May naphtha cargoes through tenders has not emerged, some traders were expecting improved gasoline demand to boost the former.
They were also expecting low volumes of western cargoes arriving in Asia next month to help ease the current naphtha glut. Naphtha, depending on its grade, can be reformed into gasoline or be used as a gasoline blendstock instead of being used as a petrochemical feedstock. There were no cash deals for gasoline in the Singapore market, but purchases since March 1 have already totalled 2.6 million barrels, surpassing February's volumes at 1.65 million barrels and January's at roughly 2.5 million barrels. Some end users are increasingly looking to replace naphtha with alternative liquefied petroleum gas (LPG), but not all traders were convinced that this could be done so soon.