20 February 2014 10:27 [Source: ICIS news]
SINGAPORE (ICIS)--Asia's intermonth naphtha spreads have rebounded at the close of trade on Thursday, supported from firming gasoline blending economics, traders said.
The first-half April/first-half May spread widened to $8.00/tonne in backwardation from a backwardation of $7.00/tonne on 19 February, ICIS data showed.
At a spread of $8/tonne, the backwardation is at its strongest since 7 February, when the backwardation stood at $9.50/tonne.
The market has been boosted by improving blending margins in Europe, as well as expectations of rising gasoline import demand from Indonesia, ahead of the country’s upcoming election, traders said.
Stronger gasoline demand will support a higher use of naphtha in the blending pool, while arbitrage naphtha supply will tighten from Europe as more naphtha supply gets diverted for blending, they said.
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