Singapore — The Asian light ends market edged up Nov. 30 morning, underpinned by slight gains on the Brent crude complex. LPG market participants are expecting Saudi Aramco to announce a month-on-month rise in December Contract Prices later Nov. 30, while gasoline traders look out for the award of Indonesian Pertamina's H1 2021 gasoline contracts and the end of partial lockdowns in Asia this week onwards.
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January ICE Brent crude futures rose 15 cents/b from the Nov. 27 Asian close to $47.73/b at 0300 GMT Nov. 30.
** The December FOB Singapore 92 RON gasoline swap opened the last trading session of the month, Nov. 30, marginally higher at around $49.85/b, a 0.6% day-on-day rise with crude staying mostly rangebound as focus was on the approaching OPEC+ meeting later in the day.
** Asian gasoline market participants this week will be closely watching the results of Pertamina's H1 2021 term tender negotiations, which will see sellers in the region secure an outlet for a minimum of 1.69 million barrels of 92 RON gasoline as well as 1.19 million barrels of 88 RON gasoline per month. The results of Pertamina's term tender will be known from Nov. 30 onwards.
** Several countries in Southeast Asia will end their respective movement restrictions this week. Myanmar for one, will see a roll back of its restrictions from Dec. 5 onwards, ending a month-long nationwide lockdown which came about following a spike in cases during the Nov. 8 general election.
** Restrictions in Indonesia and Malaysia -- two of the largest importers of gasoline in Asia -- will also see the official end of their partial lockdowns on Dec. 6. However, as COVID-19 infection cases remain high in both countries, market participants expect the governments to announce another extension on restrictions and with that, cap the recovery in Asian gasoline demand.
** The physical CFR Japan naphtha benchmark opened Nov. 30 at $409.625/mt, up $8.25/mt from the Nov. 27 Asian close on the back of higher Brent crude.
** Long supply weakened market sentiment, led by delays for steam cracker restarts, and a weak gasoline complex meant less naphtha demand for blending, leading to more cargoes available regionally and from Europe.
** Reflecting the soft market, the front month December-January Mean of Platts Japan naphtha swap contango widened to minus $4.50/mt in mid-morning trade Nov. 30, based on broker indications, compared with minus $4.25/mt at the Nov. 27 Asian close, Platts data showed.
** Swaps timespreads for January-February remained in a 75 cents/mt contango in mid morning trade Nov. 30, unchanged from Nov. 27 after it first flipped into a contango structure from backwardation on Nov. 26.
** The December East-West spread fell to a four-month low of $14.75/mt at the European close Nov. 27, and brokers pegged the East-West spread lower in mid-morning trade at $14.25/mt.
** Front month December CP propane swap notionally indicated Nov. 30 at $460/mt, versus $457.50/mt valued Nov. 27. Butane CP swap indicated $10/mt above propane.
** December-January CP propane swap backwardation indicated at $7/mt versus $2/mt the previous session, and January-February at $13/mt Nov. 30, from $14.50/mt the session before.
** Saudi Aramco to announce December Contract Price for propane and butane Nov. 30. Traders expect December propane CP to be set arouund $450-$460/mt, up $20-30/mt on the month. Expectations for butane CP were varied, with some projecting it to be $5-$10/mt above propane, some at parity to propane and one other at a $5-$10/mt discount to propane.
** VLGC freight had been rising over the last 1-2 weeks on firm demand and tight tonnage supply, sending rates on the Persian Gulf-to-Japan route to five-year highs of $87.50/mt Nov. 27, with freight set to rise further this week.
** Chinese importers tying up term 2021 supplies in recent weeks, with Jovo Energy set to award for February to May term deliveries, after Wanhua Chemical and Grand Resource awarded in week ended Nov. 27.
** Regional demand for H2 December and January delivery cargoes led by winter heating in North Asia.
** Steam crackers focused on using naphtha feedstock, as the CFR North Asia propane cargo premium to CFR Japan naphtha rallied to a near 7-month high of $112.125/mt Nov. 27, the widest since Apr. 29, Platts data showed.