Asia’s naphtha cracks were mostly down in the second half of 2022, ending the year lower on the back of poor demand-supply fundamentals, with crackers and mogas demand slowing down on poor margins.
Naphtha cracks (NAF-SIN-CRK) posted an annual decline of about 87% following three prior consecutive years of gains, and hit the lowest point of more than minus $100 per tonne in mid-June.
Depressed demand continued to weigh on the market, as evidenced from the weaker day-on-day cracks, with at least a handful of regional buyers still likely to maintain their crackers shut in the first quarter of 2023 or have plans to shut their units again in February.
Gasoline cracks (GL92-SIN-CRK) were driven higher in mid-2022 from demand in Europe and the U.S. from the peak driving season.
They closed higher day-on-day at $8.45 a barrel as support from overnight gains in U.S. gasoline futures continued to buoy trading sentiment, with some regional demand emerging in southeast Asia for spot January lots. One Vietnam-based buyer closed its tender for H1 January parcels a day earlier.
Meanwhile on the supply front, cautious market opinions continued as China’s government had yet to release export quota volumes for 2023. This is against a backdrop of higher commercial stock levels in the country for a second consecutive week, according to data from several China consultancy firms.
“There was a decent draw to gasoline inventories amid a tick higher in implied gasoline demand, as consumers dashed to the pumps ahead of both holiday travel and the bomb cyclone,” said Matt Smith, lead oil analyst at data provider Kpler.
INVENTORIES
– Gasoline stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage area rose to 1.342 million tonnes in the week to Thursday, compared with 1.306 million tonnes in the prior week, Insights Global data showed.
– Naphtha stocks dipped to 291,000 tonnes in the week from 319,000 tonnes in the earlier week, data showed.
– U.S. gasoline stocks (USOILG=ECI) fell by 3.1 million barrels in the week to 223 million barrels, compared with analysts’ expectations in a Reuters poll for a 500,000 barrel increase.
NEWS
– Oil prices edged up on Friday and were on track to post their second straight annual gains, albeit modest, in a stormy year marked by tight supplies due to the Ukraine war, a strong dollar and weakening demand from the world’s top crude importer China.
