Asia naphtha/gasoline-gasoline crack stays under pressure
SINGAPORE, Jan 16 (Reuters) - Asia's gasoline crack was at a discount of 32 cents a barrel to Brent crude on Wednesday, 1 cent higher than the previous session which was near a one-week low on the back of an unyielding glut.
The bearish fundamentals have dragged the average gasoline profit margin for the first-half of January to about 45 cents a barrel, the lowest for the period since 2009. The situation could get worse as new refineries are coming up this year in Malaysia and China and these could add some 235,000 barrels per day of gasoline to the market although not all of it would be exported. "We have large volumes of refining capacity geared towards gasoline or naphtha production coming online in the East of Suez this year," said Michael Dei-Michei, head of research at consultancy JBC Energy. "For that reason we expect gasoline supply growth to outpace demand growth to the tune of about 200,000 bpd on average in 2019," said Dei-Michei.
NAPHTHA: Asia's naphtha crack climbed 3.6 percent to a two-week high of $44.85 a tonne. South Korea's LG Chem emerged to buy naphtha for first-half March delivery, making this the first tender in South Korea for the purchase of March cargoes. The petrochemical maker could have paid premiums of more than $1 but below $2 a tonne to Japan quotes on a cost-and-freight (C&F) basis, traders said. This was a sharp jump when compared to a discount of $5 LG Chem had paid on Dec. 2 for cargoes scheduled for first-half January delivery.
* REFINERY NEWS: Japanese refiner Fuji Oil Co is likely to shut all the refining units at its sole 143,000 barrels-per-day (bpd) Sodegaura oil refinery in mid- or late May for a scheduled maintenance which could last until mid-June.
(* CASH DEALS: One deal each on naphtha and gasoline).
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