Asia light ends: Key market indicators for Feb 14-18

Asia's light ends are expected to be led by healthier naphtha demand for gasoline blending this week ending Feb. 14 after the reforming spread hit a two-year high.

The conclusion of the Lunar New Year celebrations, though, would lower Chinese travel demand.

Naphtha

** The physical C+F Japan naphtha marker rose $40/mt from the previous Asian session to $875/mt mid-morning Feb. 14 trade on crude's rally.

** Sentiment was firm mid-morning Feb. 14, as brokers pegged front-month March-April Mean of Platts Japan naphtha swap time spread at $16/mt, up $1.25/mt from the previous close, Platts data showed.

** Asian naphtha is slated for H1 April buying activity for delivery into North Asia during the week, as the trading cycle rolls forward Feb. 16.

** Supply was tight as shipping delays capped West of Suez arbitrage volumes.

** Naphtha blendstock demand is likely to be strong as the reforming spread, the difference between Singapore 92 RON gasoline and Singapore naphtha derivative, touched a two-year high at the Feb. 11 Asian close. The spread widened 15% on the week to $15.87/b at the Feb. 11 close, Platts data showed. The wider spread may spur gasoline producers to use naphtha as blendstock, boosting demand.

Gasoline

** Asia's gasoline demand, boosted by robust Chinese requirement during the Lunar New Year holidays, may ease as festivities end this week.

** The March FOB Singapore 92 RON gasoline swap rose early Feb. 14 trade, pegged notionally at around $109.56/b at 0200 GMT, up 3.73% from the previous session, Platts data showed.

** At 0200 GMT Feb. 14, US RBOB-Brent crack spread rose 1.61% week on week at $20.35/b, holding 32.23% above the $15.39/b January average, Platts data showed. This was possibly fueled by an increase in US product supplied, or implied demand, of finished motor gasoline, which rose 10.94% to 9.13 million b/d in the week ended Feb. 4, US Energy Information Administration data showed.

** While Thailand has eased COVID-19 restrictions, any incremental increase in domestic gasoline demand is expected to be met by local refineries, a trader said.

LPG

** Front-month March propane contract price swaps was pegged at $793/mt Feb. 14, versus $774/mt Feb. 11. The March-April backwardation was indicated at $29/mt Feb. 14 from $29.50/mt the previous session.

** CP propane swap was indicated at $2/mt below butane, steady to the previous session, as the region faced relative tightness for butane from the US and Middle East, especially in H1 March, as ADNOC's March term acceptances were heard to include some cargo loading delays, market sources said.

**Chinese demand post-Lunar New Year is resuming steadily with Tianjin Bohai heard to have awarded its purchase tender for 46,000 mt of propane for March delivery, while Ningbo Huatai Shengfu Wealthy Polymer Material is seeking 23,000 mt or 46,000 mt of propane for March 11-20 and March 21-30 deliveries. The tender closes Feb. 14 with next-day validity,.