The Asian naphtha crack slipped to US$145.9/ton on Thursday amid fading impact of reduced European cargoes coming to Asia in July, due to strong West African gasoline demand, as per traders in Reuters. Strong Nigerian gasoline demand has prompted the European market to focus on selling gasoline rather than to export naphtha to Asia.
"It has been a good run," said a Singapore-based trader. "Demand for blend stocks is still good in Singapore and in the West, but the strong gasoline demand could stop and the naphtha market may fall," he said. To sustain the naphtha bull-run, demand from the petrochemical sector was needed and supplies have to be kept tight to some extent, traders said. "But the outlook for naphtha from the second half of this year is not looking too good for sellers," said a Singapore-based source.
Additional new supplies coming from condensate splitters in Singapore and South Korea from H2-2014 and the Middle East are gradually weighing on sellers' sentiment. Abu Dhabi Oil Refining Co (Takreer) is expected to finish doubling the capacity of its 415,000 bpd refinery by the end of the year and that would raise its naphtha exports. This could be the reasons behind why Kuwait Petroleum Corp (KPC) is seeking to settle its August 2014 to July 2015 full-range contract with its Asian buyers at a lower premium of US$29/ton above Middle East quotes on a free-on-board (FOB) basis. This is down 10.34% compared to its April 2014 to March 2015 contract sealed at US$32/ton in early February. Traders said at least one buyer might have accepted the premium but this could not be confirmed. Once a buyer accepts the premium level, it sets the tone for the remaining customers.
30-May-14 
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