This came a day after Formosa bought around 100,000 tonnes of open-specification grade naphtha for first-half February arrival at Mailiao at a discount of $3 to $4 a tonne to Japan quotes on a cost-and-freight (C&F) basis. The price levels were higher compared to the discount of about $6.50 a tonne it had paid for 50,000 tonnes on December 15.
Chinese Unipec was also in the market this week seeking naphtha for January delivery, but the results of the tender were unclear. Asia's gasoline crack recovered from a three-session low to reach a two-month high of $11.64 a barrel, for a second time in this week, on strong global demand.
Although Singapore's light distillates stocks climbed 3.1 percent, or 374,000 barrels to reach a four-week high of about 12.34 million barrels in the week to December 28, the volumes were slightly lower compared to a year ago at 12.60 million barrels, official data showed. China in the meantime has cut oil product export quotas to the nation's four oil majors by 40 percent in the first round of licences for 2017 while the independent refiners, also known as 'teapots' were not included in the list.
The total export quota for gasoline granted in this first round for 2017 to PetroChina, Sinopec, CNOOC and Sinochem were 3.65 million tonnes, down nearly 17 percent compared to a year ago. In the US, gasoline stocks fell by 2.8 million barrels, data from industry group the American Petroleum Institute showed on Wednesday. This was against analysts' expectations of a 1.3-million-barrel gain.
Copyright Reuters, 2017