Naphtha spread between Europe and Asia narrows, cracks weaker
London (Quantum Commodity Intelligence) - The spread between naphtha cargoes in northwest Europe and Japan narrowed sharply Thursday morning, extending a trend seen over the week, according to Quantum data, following reports of the first large cargo fixed from Europe to Asia for six months.
Shipping lists show trading firm Vitol has booked the 'Sea Beauty' to take 120,000 mt of naphtha from the Amsterdam-Rotterdam-Antwerp (ARA) area to Japan, according to Argus, citing Vortexa data.
The ship tracking company said this would be the first naphtha cargo larger than 90,000 mt to depart Europe for Asia-Pacific since November 2020.
Crack values for July CIF Japan naphtha cargoes have slumped this week amid the rally in crude, shedding $1/b on Monday and Tuesday to around -$2/b on Wednesday.
But they have also come under pressure in Europe, amid reports of an influx of cargoes from the US as refineries increase utilization rates.
Around 375,000 mt of US Gulf Coast naphtha is scheduled to arrive in Europe during June, according to Vortexa data, the highest monthly total in at least four years.
The arrival of the cargoes coincides with softening gasoline cracks in Europe, and a lack of demand for naphtha for blending, after consistent builds of gasoline stocks in the US undermined arbitrage opportunities for the road fuel.
US gasoline stocks increased 2 million barrels over the week to June 11, adding to the 7 million barrels build a week earlier, according to the US Energy Information Administration.
Cracks for July US RBOB gasoline in New York versus Brent dropped to around $19/b Thursday morning, at 0930 UK time, down around $0.5/b from 1630 UK time Wednesday and extending a trend seen throughout this month.
The July crack for RBOB was trading around $23.75/b at the start of the month.
The spread between July RBOB and Eurobob barges in ARA narrowed to $19.50/mt Thursday at 0930 UK time, down from $20.75/mt on Wednesday at 1630 UK time, and $22.50/mt on Tuesday at 1630 UK time.
