Naphtha crack in Asia edges up to a 3 session high of US$52/ton

10-May-16

Naphtha crack in Asia edged up by about 2% to reach a three-session high of US$52/ton at the start of this week, after falling to a two-month low in the previous session, as per Reuters. However, traders said supplies remain ample as lower incoming Western cargoes were being offset by high refinery runs in Asia, causing the glut to persist. Naphtha, depending on its grade, can be reformed into gasoline or used as a blending component for the motor fuel apart from being used as a petrochemical feedstock. Demand for naphtha from the petrochemical sector in general has remained firm but Japan had shut some of its old crackers permanently as they were no longer cost effective. Gasoline on the other hand has been battered by unrelenting high supplies and a lack of demand despite May to July usually being the peak season for petrol consumption, traders said. The weak fundamentals have pushed Asia's gasoline crack down for the fourth straight session on Monday to reach a 2-1/2 week low of US$7.20 a barrel, as per Reuters.