Asia light ends: Key market indicators this week

Singapore — The Asian light ends markets opened Feb. 1 on a mixed note, with gasoline and naphtha prices slightly weaker, tracking marginal crude losses, while LPG strengthened.

Weakness in US RBOB-Brent crack and sluggish Asian fundamentals were pressuring Asia gasoline lower while healthy arbitrage inflows from the West was keeping Asia naphtha well-supplied.

Qatar Petroleum is set to announce its acceptance of March loading term LPG nominations later in the week, after Saudi Aramco Jan. 31 announced its February propane CP at $605/mt and butane CP at $585/mt.

April ICE Brent crude futures stood at $55.15/b at 0300 GMT Feb. 1, down from $55.17/b at 0830 GMT Jan. 29, S&P Global Platts data showed.

GASOLINE

** The March FOB Singapore 92 RON gasoline swap kicked off the new trading month around $59.48/b, about 0.97% lower from the previous trading session, as a halt in the US RBOB-Brent crack rally as well as lower Brent crude prices weigh on the motor fuel complex.

** Weakness on the US RBOB-Brent crack front – which was the main driving force for surge in crack spreads last week – came amid mixed sentiment, as bullishness surrounding the easing of lockdown measures in several US states such as New York and California was being balanced out by the bearishness of rising cases of COVID-19.

** In Asia, eyes will be on the scheduled date of easing of Malaysia's second Movement Control Order, or MCO, on Feb. 4. While the number of cases in Malaysia recorded a fresh record high on Jan. 30 at 5,728 cases, according to John Hopkins University data, the Malaysian government is still in favor of imposing more stringent social distancing measures instead of a total economic lockdown.

** Elsewhere, Taiwan's state-run CPC Corp. is expected to restart its residual fluid catalytic cracker at the 400,000 b/d Dalin refinery on Feb. 7. The 80,000 b/d unit was forced to shut on Jan. 19 due to technical issues, Platts reported earlier.

NAPHTHA

** The physical CFR Japan naphtha benchmark stood at $510.625/mt in early trade Feb. 1, down $1.25/mt from the Jan. 29 Asian close, tracking lower crude prices.

** Purchasing activity for H2 March delivery cargoes into North Asia is expected to start in the week, and may see busy activity due to upcoming Lunar New Year holidays.

** Brokers pegged the front month March-April Mean of Platts Japan naphtha swap spread at $5.50/mt in mid-morning trade Feb. 1, firmer than the Jan. 29 Asian close when the front month February-March spread was $4/mt, Platts data showed.

** Naphtha was well-supplied in the region due to healthy arbitrage from the West of Suez, sources said.

** At least 636,000 mt of January-loading of US Gulf Coast naphtha was booked for East-bound voyages with another 196,000 mt booked for Feb. 1-8 loading, while European naphtha flowing East was at least 1.41 million mt for January-loading and 420,000 mt for Feb. 6-12 loading, data from market sources and Platts trade-flow software cFlow showed.

LPG

**Saudi Aramco set February term contract prices above traders' expectations, with propane at $605/mt, up $55/mt versus January, and butane CP at $585/mt, up $55/mt. This was the eighth straight monthly increase for propane CP, and seventh rise in a row for butane, prompted by healthy heating demand in North Asia amid a severe winter that is set to remain harsh in Japan's northern areas through February, and robust requirements from Chinese PDH plants.

**New front-month March CP propane swap was notionally indicated Feb 1. at $544/mt, versus $541/mt valued Jan. 29. March propane/butane CP swap was indicated at parity.

**Qatar to announce acceptances of March loading term nominations early this week, after February acceptances saw no cuts or delays.

**Market watching impact of fog disruptions in US Gulf Coast LPG exports.

**Other than movements of Indian term cargoes, VLGC rates continued to weaken below $56/mt, the lowest in around four months, after hitting more than five-year highs at $119/mt Jan. 12, Platts data showed.