Asia's naphtha crack slipped from a three-week high to end the week at a two-session low of $72.75 a tonne as deals fell into a slumber following a period of demand ahead of the festive season. Traders' concerns that naphtha oversupply would extend through the first quarter lingered. Crackers shutting for scheduled maintenance in the first-quarter, including in Malaysia and Thailand, will dent demand, they said.
As for gasoline, Asia's crack level held firm at $10.85 a barrel on strong global demand despite this being an off-peak season. "Demand in Europe and the US has been strong recently and that has some impact on cargoes coming to Asia," said a Singapore-based trader. Although Asia is not structurally short of gasoline, unlike in the case of naphtha, gasoline cargoes sporadically come to the East from the West such as Norway and the US and vice versa.
US gasoline demand had led to its stocks falling by 1.3 million barrels last week against analyst expectations in a Reuters poll for a 1.4 million-barrel gain. Indonesian Pertamina, Asia's top gasoline importer, was out looking to buy a total of 40,000 barrels of 98-octane grade gasoline for January 24-26 and January 30 to February 1 arrival at Uban and Surabaya, respectively, through a tender closing on December 28.
It had previously sought 80,000 barrels of the high octane gasoline in four cargoes to be delivered to Surabaya, Jakarta and Uban in January. But the results of the tender, which had closed on December 21, were not immediately clear. The results of another Pertamina tender in which it had sought a total of 300,000 barrels of 92-octane grade gasoline in three cargoes for January to February loading from Singapore and Malaysia were also not known. India's Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corp Ltd (HPCL) have outstanding tenders to sell at least 90,000 tonnes of naphtha for late December to first-half January lifting from ports of Kochi, Mumbai and Vizag.