Gasoline prices fell by almost US$40/ton to a two month low, while naphtha has gained strength in Europe. Naphtha held premiums to gasoline in Europe, due to tight supplies in the Mediterranean and fresh Asian demand. Naphtha swap for January was at about US$657/ton. As realization is healthier in the resurgent markets of Asia, over 400,000 tons of European naphtha has been provisionally booked to go to Asia this month.
In Asia, open spec naphtha contract for H2-January has been assessed at about US$700/MT CFR Japan, while H1-February contract was valued at US$690/MT. Asian naphtha cracks dipped by almost five dollars/ton in a day, after touching a new high in the previous session, on concerns of an overheated market.
Naphtha demand in Asia peaked about two months ago, and has plateaued since. Naphtha markets face several bearish influences including flat demand at high levels, higher refinery run rates in Japan, a weak gasoline market, large exports from India and huge arbitrage cargoes.