Gasoline cracks in Asia extended gains to rise to a five-week high of US$9.91 a barrel supported by tighter supplies caused by plant outages in Taiwan and Malaysia, as per R euters. Formosa is operating two residue fluid catalytic crackers (RFCCs) at reduced rates this week due to a shortage of fuel oil feedstock. This was because it had shut a unit used to remove sulphur from fuel oil following an outage. Formosa had sold two spot cargoes for November delivery but traders said they were likely to be shipped out as planned.
The average gasoline cracks for this year at nearly US$9 a barrel have been stronger versus the same period up to Nov. 16 of last year at US$7.22 a barrel. European cracks were equally strong as it surged to almost US$25 a barrel in early September, its highest since 2008, and remained in double digits into October, before falling off with the end of the U.S. summer driving season. That was one of the key factors previously for drawing naphtha away from Asia as Europe used more of the light fuel to make gasoline.
Naphtha price in Asia dipped to a four-session low of US$942/ton on Friday, tracking Brent crude losses. Margins slipped to slightly over a three-week low of US$131.33/ton as spot demand for January cargoes have yet to be seen. Traders said it was still relatively early for buyers to lock in January cargoes and most prefer to adopt a wait-and-see stance in view of the uncertainties surrounding the global economy.