Naphtha crack slips on firmer crude prices, refinery shutdowns

Asia's naphtha refining margins snapped a two-day winning streak on Tuesday, as crude oil prices strengthened and regional refinery outages weighed on demand prospects for the petrochemical feedstock.

The crack (NAF-SIN-CRK) lost $5.37 from the previous day to $106.23, as the backwardation between the second-half March and April contracts widened by $0.25 to $7.

Within Southeast Asia, four naphtha crackers with a combined ethylene capacity of 2.23 million metric tons (mt) per year have shut since 2024, while Malaysia’s 1.2 million mt/year PRefchem plant had an unplanned outage on Feb. 3 with no restart date announced, LSEG Oil Research said in a report.

The refinery disruptions have already translated to a naphtha demand loss of over 700,000 mt per month, assuming an average cracker run rate of 80%, LSEG added.

For the months ahead, China's Maoming Petrochemical, with a cracking capacity of 640,000mt/year will shut in mid-March for six weeks, while South Korea's 915,000 mt/year YNCC No.2 cracker will be closed for maintenance from Feb. 10 to Apr. 4, according to LSEG data.

In the gasoline market, the crack (GL92-SIN-CRK) steadied amid quiet trading activity, ticking up by $0.14 from a day earlier to $10.07.

INVENTORIES

U.S. crude oil and gasoline stockpiles were expected to have risen last week, while distillate inventories likely fell, a preliminary Reuters poll showed on Monday.

Analysts estimated gasoline (USOILG=ECI) stockpiles rose by about 1.6 million barrels last week, while the rate of refinery utilisation (USOIRU=ECI) was estimated to have risen by 0.3 percentage points from 84.5% of total capacity in the previous week.

NEWS

Oil prices extended gains on Tuesday amid concerns over Russian and Iranian oil supply and sanctions threats, despite worries that escalating trade tariffs could dampen global economic growth.

U.S. sanctions on Russia should not affect Moscow's oil trade with India, Pavel Sorokin, Russia's first deputy energy minister, said on Tuesday, adding that it was too early to assess the impact of the latest restrictions.

Indian oil companies are looking to buy U.S. liquefied natural gas (LNG), buoyed by the Trump administration's lifting of a ban on export permits for new projects, Oil Secretary Pankaj Jain said on Monday.

Saudi Arabia's crude oil supply to China is set to slide in March from the prior month, trade sources said on Tuesday, after the kingdom hiked its prices to the highest in more than two years.

SINGAPORE CASH DEALS

Two naphtha trades, no gasoline trades.

PRICES