Asian naphtha opens $61.50/tonne higher on crude

09 June 2008 05:05  [Source: ICIS news]

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

Asian naphtha opened $61.50/tonne (€38.75/tonne) higher. Second half July prices indications were pegged at $1,158.00-1,161.00/tonne CFR (cost and freight) Japan, first half August at $1,154.50-1,157.50/tonne and second half August at $1,151.50-1,154.50/tonne.

They had also closed firmer on Friday. Second half July prices indications were pegged at $1,097.50-1,098.50/tonne, first half August at $1,093.50-1,094.50/tonne and second half August at $1,090.50-1,091.50/tonne.

The second half of July contract traded late Friday at $1,098.00/tonne with Glencore selling to Sempra. The same buyer also snapped up the second half of August contract at $1,092.00/tonne from Mitsui Oil Asia Hong Kong.

Last month, Asian naphtha broke another new historical record high, by trading at $1,125.00/tonne between Itochu and Mitsui Oil Asia Hong Kong for the second half of July contract.

Supplies had been tightening in Asia with less supplies coming from India and Europe.

Market players said they expect supplies to be tight in the second half of this year. 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 and exports are expected to increase, it is still a far cry from last year’s monthly volume of 1 million tonnes at the end of 2007, sources said. 

Asian naphtha markets had been softer as demand from Northeast Asian end-users slowed after they have earlier covered their July requirements.

Oil edged slightly lower on Monday, as OPEC's resistance to pumping more crude kept prices near their record high from Friday, when the falling dollar and Middle East jitters fuelled caused a $11/barrel jump.

US April WTI was $137.49/bbl, down $1.05; April Brent at $136.45/bbl, down $1.24.

Asian naphtha prices were up 16.75% versus gains of 16.08% in the Brent crude markets since early May.

($1 = €0.63)

By: Desmond Chia
+65 6780 4359

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