Naphtha cracks hit one-week high, gasoline margins slump

London, (Quantum Commodity Intelligence) – Refining margins for naphtha rebounded to a near one-week high on Tuesday, with Q3 cracks versus Brent cash crude rising to near $86/mt – the highest since 19 April – while front month cracks hit $90/mt versus cash Brent.

Tenders for spot cargoes from petrochemical producers saw May swaps rise to $577.25/mt, up $12/mt on the day, with Q3 rising $9.75/mt to $559.50/mt, according to Quantum data.

The rally in naphtha cracks over the past week has masked what is essentially a poor return on the rest of the complex as continued fears over fuel demand in India weighed on other cuts of the barrel.

Notably, front month gasoline cracks on a FOB Singapore basis are the lowest in a month, with May at $5.87/b, the highest since March 26.

With Delhi in lockdown and daily case rate in excess of 350,000 for the fifth successive day, gasoline prices relative to crude have slumped.

Adding bearish sentiment was news that Japan has declared a state of emergency in Tokyo and other regions to clamp down on any outbreak there before it accelerates.