Asia light ends: Key market indicators for Dec 6-10

Asia's light ends markets opened the trading week starting Dec. 6 with the indicators for key markets diverging, with naphtha and gasoline lower while LPG was seeing a recovery from recent losses, though anticipation of ample supply could temper a sustained rebound in demand.

Front-month February ICE Brent crude futures stood at $71.36/mt at 0422 GMT Dec. 6, down from $71.88/b at the 0830 GMT Asian close Dec. 3.

Gasoline

** The January FOB Singapore 92 RON gasoline swap was pegged around $78.83/b in mid-morning trade Dec. 6, down 1.03% from the previous session, S&P Global Platts

data showed.

** The US RBOB-Brent crack stood at $12.16/b at 0230 GMT Dec. 6, down 3.87% from the previous session.

** Asia's gasoline market activity was muted by uncertainty over the omicron variant as several countries shut international borders to southern African countries.

** Thailand and China had sufficient gasoline inventory and were unlikely to issue further spot buy tenders this month, market sources said. Australia was heard to be buying cargoes cautiously to match demand and not building inventories for the moment.

** Vietnamese trader Petrolimex is seeking for neighboring Cambodia 10,000 mt of 92 RON gasoline for Dec. 10-20 loading from Van Phong Terminal, Singapore, Thailand, Malaysia, Brunei, Philippines, Karimun or southern China in a tender closing Dec. 6.

Naphtha

** The physical C+F Japan naphtha marker fell $3.625/mt from the previous Asian session to $665.875/mt in mid-morning trade Dec. 6.

** Lackluster sentiment was reflected in naphtha swaps; brokers pegged front-month December-January Mean of Platts Japan naphtha swap time spread at $8/mt in mid-morning trade, down $1/mt from the previous close, Platts data showed.

** Sentiment in the Asian naphtha market has been bearish as volatile crude oil markets, increasing Western arbitrage supply and low LPG prices weigh on demand.

** The CFR Japan naphtha physical crack against front month ICE Brent crude futures fell $5.60/mt day on day to $130.40/mt at the Asian close Dec. 3, Platts data showed.

** Naphtha blendstock demand was expected to be supported as the reforming spread, or difference between Singapore 92 RON gasoline and Singapore naphtha

derivatives, surged 48.5% week on week to $7.90/b at the Dec. 3 Asia close, Platts data showed The spread widened 78 cents/b day on day Dec. 3 after closing at a 10-month low Nov. 30 at $4.50/b. The widened spread makes it economically viable for gasoline producers to use naphtha as blendstock.

LPG

** Front-month January propane CP swaps were indicated at $660/mt Dec. 6, up from $643/mt the previous session and $135/mt below December term CP.

**January-February CP propane was pegged at a $13/mt backwardation versus an $11/mt backwardation the previous session, while February-March was indicated at a backwardation of $32/mt, versus $31/mt the previous session.

** Asian steam cracker operators were starting to consider using LPG as alternate petrochemical feedstock after the spread between the January FEI propane and Mean of Platts Japan naphtha assessments flipped to a discount of $7/mt Dec. 3 from a 50 cents/mt premium the previous session. The last time the FEI propane/MOPJ spread was in discount was June 30 at minus $12/mt, Platts data showed.

** Qatar Energy has announced acceptances of January-loading term cargoes with some delays heard, trade sources said. Abu Dhabi National Oil Co. or ADNOC will make its announcement around end this week and Saudi Aramco around Dec. 17-20.