Asia Light Ends: Key Market Indicators for Nov 1-5

According to Platts data, Asia’s light ends were mixed during mid-morning trade Nov. 1, as crude oil futures weakened, even as gasoline is getting support from improved regional travel, while naphtha looks to positive margins to sustain cracker operations,.

LPG is eyeing improving North Asian heating demand during winter and Chinese propane dehydrogenation plants boosting operations after returning from maintenance.

Front-month January Brent crude futures was trading at $83.40/mt at 0352 GMT, down from $83.84/b at the 0830 GMT Asian close Oct. 29.

Gasoline

• December FOB Singapore 92 RON gasoline swap was notionally pegged around $91.99/b early Nov. 1 trade, down 3.63% from Oct. 29, as crude dipped amid weak Chinese data.
• Southeast Asia’s November gasoline demand is expected to hold at October levels, sources said. India was leading the recovery as demand for most oil products had regained pre-pandemic levels, driven by transportation fuels such as gasoline.
• Indonesia’s state-run Pertamina was recently seeking up to 1.5 million barrels of spot 92 RON gasoline for November and December.
• Thailand’s gasoline consumption is slated to improve in November, as the country has reopened to fully-vaccinated foreign tourists from ‘low-risk’ countries to capital Bangkok on Nov. 1, in an attempt to revive tourism.
• Supporting Asia’s gasoline complex are signs of tightening supply emerging in the US. Total gasoline stockpiles declined 1.99 million barrels to 215.75 million barrels the week ended Oct. 22, lowest in almost four years, Energy Information Administration data showed. Gasoline stocks were last lower in the week ended Nov. 24, 2017.

Naphtha

• Physical C+F Japan naphtha dipped $10.375/mt from Oct. 29 to $779.25/mt in mid-morning trade Nov. 1 on lower crude.
• Stable sentiment was reflected in naphtha swaps, with brokers pegging front-month physical half-month November-December Mean of Platts Japan naphtha swap spread at $13.75/mt in mid-morning trade Nov. 1, Platts data showed.
• The new half-month cycle will see the start of activity for H2 December-delivery cargoes to North Asia. Bullish market sentiment is expected this week on firm demand from Asian steam crackers amid positive olefin margins, sources said.
• Naphtha demand as steam cracker feedstock remains firm as the key CFR Northeast Asia ethylene and C+F Japan naphtha spread held above the typical breakeven of $300-$350/mt for non-integrated producers, likely keeping operations near, or at full capacity, market sources said. The spread stood at $410.375/mt at the Oct. 29 Asian close, Platts data showed.
• CFR Japan naphtha physical crack against front month ICE Brent crude futures rose $4.85/mt day on day to $156.625/mt at the Oct. 29 Asian close, Platts data showed.

LPG

• New front-month December propane contract swap was notionally indicated at $835/mt Nov. 1, up from $821/mt Oct. 29.
• Saudi Aramco set November propane Contract Price at $870/mt, up $70/mt from October CP, and butane CP at $830/mt, $35/mt above October. This is the sixth-consecutive monthly rise in the CPs and the highest since February 2014 propane CP at $970/mt, and since April 2014 butane CP at $845/mt, Platts data showed. The November propane and butane CPs were above lifters’ recommendations.
• December-January propane CP swap was indicated in $8.50/mt backwardation, narrowing from $16/mt the previous session, while January-February was indicated at $20/mt backwardation widening from $19/mt previous session.
• Market seeing support from winter heating demand in Japan and China, where demand from PDH plants are also recovering as they ramp up production after maintenance.
• Middle East producers’ acceptances of December-loading term cargo nominations start early this week with Qatar Petroleum, followed by ADNOC by end next week and Saudi Aramco the following week.