Asian naphtha cracks rise again as European gasoline margins climb

London, (Quantum Commodity Intelligence) - Asian naphtha refining margins climbed for the eighth consecutive day on Wednesday, as European gasoline cracks rallied, hauling up European naphtha prices and shutting the east-west arbitrage route that supplies Asia with additional gasoline and petrochemical feedstock.

Cracks on a FOB Singapore basis for front month naphtha swaps (June) versus August cash Brent have risen above $100/mt – a six-week high for nearby crack levels as the east-west spread remained holed at under $10/b.

The rise in naphtha margins will force up feedstocks for petrochemical producers and lead to higher gasoline prices in Asia as supply from Europe starts to dwindle over the summer months.

It comes as European gasoline margins rose 17.5% in the past week on anticipation that a vaccination programme across Europe will lead to more normal gasoline demand ahead of the summer.

Eurobob gasoline margins (E5) on a FOB AR basis were marked at $11.38/b, according to Quantum data, as European states accelerate their vaccination programme.