But the naphtha market will remained choppy as high gasoline stockpiles would drag on the former. Northwest European gasoline refining margins have already touched seven-year lows of minus $3.80 a barrel on Thursday. Asia's gasoline crack was at more than a seven-year low of $2.12 a barrel discount to Brent crude on Thursday before the discount narrowed by 9 cents to $2.03 a barrel on Friday.
More gasoline supplies are expected with at least three as mega refineries springing up this year in China and Malaysia. According to a note by consulting firm FGE, the start-up of Malaysia's RAPID will displace some of the country's gasoline imports over 2019 to 2020.
FGE expects RAPID's crude runs could average 130,000 to 150,000 bpd this year, increasing to 260,000 to 280,000 bpd next year. That could help reduce Malaysia's gasoline imports to 150,000 bpd in 2020 versus 220,000 bpd in 2018, it said. Malaysia is Asia's second largest gasoline importer after Indonesia.
India's Oil & Natural Gas Corp (ONGC) and its subsidiary Mangalore Refinery Petrochemicals and Ltd (MRPL) have each offered 35,000 tonne of naphtha for Feb. 8-9 loading from Mumbai and March 16-18 loading from New Mangalore respectively through separate tenders closing on January 29. Reliance Industries was aiming to fetch premiums in the mid teens a tonne level for a naphtha cargo scheduled for first-half March loading from Sikka but the end result of the tender was not immediately clear, traders said.