UpdateAsia naphtha crack spread rallies to near $100/tonne

10 August 2012 11:38  [Source: ICIS news]

SINGAPORE (ICIS)--Asia’s naphtha crack spread has surged to nearly $100/tonne (€81/tonne) on Friday’s close, partly on increased prospects to use more naphtha for gasoline blending, traders said.

Scheduled maintenance at a couple of key Indian refineries, meanwhile, would lead to tighter naphtha supply going forward, they said.

The Asian naphtha crack spread for second-half September rallied to $99.65/tonne against September Brent crude futures, the strongest since 14 May, according to ICIS data.

“The reforming margin is still strong,” said a trader, referring to the price spread between motor gasoline and naphtha.

Asian gasoline supply is currently in a shortfall, because refinery upsets in the US prompted higher demand for arbitrage gasoline material from Asia, traders said.

Refinery shutdowns in Asia also tightened gasoline supply, they added.

Naphtha supply from key exporter – India – is seen getting tighter amid refinery turnarounds, fuelling a surge in premiums in the latest batch of Indian sales tenders, traders said.

“There will be less Indian supply because of maintenance,” a trader said.

Open-spec prices for the second-half September contract extended gains despite falling Brent crude futures in Friday afternoon trade. Prices rose by $20.50/tonne from Wednesday to $943.50-944.50/tonne CFR (cost and freight) Japan. Singapore's oil markets were closed on Thursday.

($1 = €0.81)

By: Felicia Loo

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