Strong naphtha, tight supply prop light sweet, sour crude oil premiums in Asia

23-Dec-15

Record high naphtha cracks are pushing up spot differentials for light sweet and sour crudes in Asia and the Middle East, with premiums for naphtha-rich grades from Australia, Abu Dhabi and Russia touching multi-year highs, as per Platts. Regional condensates continue to outperform in the broader Asian crude complex with premiums for February-loading cargoes of Australia's North West Shelf condensate and Qatar's Deodorized field condensate more than US$3/barrel higher than for January-loading cargoes. Australia's NWS condensate premium against Platts Asian Dated Brent set a new record high of US$4.60/b Monday, beating the previous peak of US$3.60/b in February 2009. Platts assessed Qatar's DFC at a premium of US$6.70/b to Platts front-month Dubai crude assessments Monday, the highest since posting a US$7/b premium in June 2008. "It looks like buyers are willing to pay up and grab anything that yields decent amount of naphtha light grades are [very strong] and [naphtha] crack is too good," said a regional sweet crude trader. Naphtha cracks continue to hover around multi-year highs. The second-month naphtha to Dubai swap crack crossed the US$10/b mark to hit US$10.29/b Monday, the highest level since US$10.52/b on May 15, 2007, Platts data showed. Traders expect strength of the regional light crude grades to depend on where naphtha cracks were headed, but it was too soon to tell. "It's hard to say if the naphtha cracks will be strong going into March, it's a function of the flat price and the cracks," said a Singapore-based crude trader.