Asia’s gasoline refining profit margin declined on Thursday after inventories at a key regional trading hub rose, although a large decrease in U.S. stocks limited the fall.

The crack (GL92-SIN-CRK) eased to $10.09 per barrel over Brent crude compared with $11.08 a day earlier. Window activity gained momentum after 200,000 barrels of benchmark-grade of gasoline changed hands in two separate deals, market participants said.

In the naphtha market, three deals for first-half September naphtha surfaced at the window, lifting demand sentiment, they added.

However, refining profit margin for naphtha (NAF-SIN-CRK) plunged to $66.93 per metric ton over Brent crude on Thursday in a steady backwardation of $8.75 a ton.

“Looking ahead, as the Israel-Iran conflict concludes with a U.S.-brokered ceasefire, Asia’s focus will shift to the upcoming July 9 trade tariff deadline,” JP Morgan Commodities Research said in a note.

“Despite some initial disruptions, naphtha demand in East Asia has remained stable due to front-loading of imports,” the note said, adding that without swift resolutions and trade agreements between the U.S. and other regional partners, there could be a decline in the consumption of feedstock products.

INVENTORIES

Singapore light distillate stocks rose by 715,000 barrels to a two-week high of 13.329 million barrels in the week to June 25, Enterprise Singapore data showed.

U.S. gasoline stocks (USOILG=ECI) fell by 2.1 million barrels to 227.9 million barrels last week, government data showed, also more than analysts’ expectations for a 381,000-barrel build.

NEWS

– The U.S. sent letters to Enterprise Products and Energy Transfer on Wednesday informing the companies they could load ethane on vessels destined for China but could not unload the ethane in China without authorization, according to a person familiar with the matter and copy of one letter.
– Oil prices were steady on Thursday after erasing earlier gains as investors remained cautious about the Iran-Israel ceasefire while also shifting focus to market fundamentals.

SINGAPORE CASH DEALS

Three naphtha trades and two gasoline deals.
Source: Reuters