Asia's naphtha inter-month spread was entrenched in deep backwardation of $9 a tonne for a third straight session on Thursday due to tighter supplies while demand remained strong. Give the current fundamentals, buyers were paying more for cargoes. Japan's Showa Denko paid a premium of about $10.50 a tonne to Japan quotes on a cost-and-freight (C&F) basis.
This was sharply higher than the premium of $2 to $3 a tonne Idemitsu paid on January 10 for February cargoes. In India, Bharat Petroleum Corp Ltd (BPCL) has sold 35,000 tonnes of naphtha for February 17-19 loading from Kochi to Socar at premiums in the mid-teens a tonne level to Middle East quotes on a free-on-board (FOB) basis.
This was higher than levels BPCL fetched for two January cargoes sold to Petro-Diamond and PetroChina at $14.50 and $5 a tonne respectively. Asia's gasoline crack held firm at $11.32 a barrel, up from $11.31 from the previous session, supported by tight supplies and brisk cash demand. Five deals totalling 250,000 barrels were traded in the Singapore cash market, making this the highest volume transacted since January 17.
Hin Leong bought three of the five cargoes, with ENOC buying the other two cargoes. The island's light distillates stocks, which comprise mostly gasoline and blending components for the fuel, slipped 0.8 percent or 116,000 barrels to a two-week low of 13.7 million barrels in the week to January 25, official data showed.