Asian naphtha opens $35/t higher on crude gains

06 June 2008 04:09  [Source: ICIS news]

SINGAPORE (ICIS news)--Asian naphtha prices opened early Friday higher on firmer crude markets in the west, industry sources said.

 

Naphtha opened $35.00/tonne higher in Asia, with second half July price indications pegged at $1,104.50-1,107.50/tonne CFR (cost and freight) Japan, first half August at $1,100.50-1,103.50/tonne and second half August at $1,097.50-1,100.50/tonne.

 

A first half August contract traded late Thursday at $1,067.00/tonne CFR Japan between Shell and Cargill.

 

Early last week, Asian naphtha broke another new historical record high, when a second half July contract traded at $1,125.00/tonne CFR Japan between Itochu and Mitsui Oil Asia Hong Kong.

 

Supplies had been tightening in Asia with less supplies coming from India and Europe, leading market players to expect supplies to tighten in the second half of this year.

 

Meanwhile, no fresh arbitrage cargoes were seen slated for Northeast Asia despite the widening open west-east window. Although naphtha supplies from India are still forthcoming, it is still a far cry from last year’s monthly volume of one million tonnes at the end of 2007, sources said. 

 

Asian naphtha markets had been firming due to strong demand from Northeast Asia last week, with South Korean end-users seen snapping up cargoes for delivery in first half and second half of July.

 

US crude oil futures climbed on Friday after leaping more than four percent the previous day as funds shifted back into oil after the European Central Bank signalled it may raise interest rates, pushing down the U.S dollar.

    

Front-month US crude for July delivery was hovering at the $128/barrel mark. On Thursday, it rose by $5.49/barrel to $127.79/barrel.

 

Asian naphtha prices were up 13.88% versus gains of 11.15% in the Brent crude markets since early May.  

By: Desmond Chia
+65 6780 4359

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