Naphtha premiums firm in the Middle East amid supply tightness

13-Dec-10

Supply tightness kept gasoline and naphtha premiums firm in the Middle East, with no sign of easing until early 2011 amid continuing refinery maintenance shutdowns, as per Reuters. Outages in Kuwait and Oman have tightened the Gulf gasoline market, where a lack of cargoes from Singapore due to closing arbitrage window has also contributed to the shortage. Kuwait National Petroleum Company (KNPC) has shut some units at its Mina Al-Ahmadi and Mina Abdullah refineries for maintenance, while Oman Refineries and Petrochemical Co (ORPC) has shut its 116,000 bpd oil refinery in Sohar. Naphtha markets have been equally tight making blending for gasoline uneconomical. Saudi Aramco will reduce supplies to Asia by at least 580,000 tons in H1-2011 due to planned maintenance at two of its refineries. Kuwait Petroleum Corp has sold 24,000 tons of light naphtha for late December loading to South Korean trading house Hanwha Corp at a stronger premium due to tight supplies in Asia.