The Asian naphtha margin extended gains to a four-session high of US$132.05/ton as expectations of vibrant demand ahead overtook concerns of a possible influx of Western exports to the East for February arrival, as per Reuters.
A fire at a fuel storage terminal of state-run Indian Oil Corp (IOC) over the weekend may have also affected sentiment as the area has nine tanks, of which five were for gasoline. This came shortly after PetroRabigh decided to shut its refinery for a 20-day maintenance starting in late December after a power cut disrupted its supplies. Asia could still be grappling with low inventories at a time when crackers are mostly running at high rates. Most producers will not be able to delay their purchases if they need the naphtha feedstock cargoes.
These factors were temporarily keeping concerns of incoming Western cargoes at bay. Technically, traders will be driven to move cargoes from Europe and the Mediterranean to Asia when prices in the latter are at least US$27/ton higher than those in Northwest Europe. Current front-month price in Asia at US$966.50/ton is at least US$34/ton higher than prices in Northwest Europe.
10-Jan-13 
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