Asia is structurally short of naphtha and relies on the Middle East and the West, including Europe and the Mediterranean, to plug the supply gap. But Middle Eastern exports to Asia were seen lower recently and this has also tightened supplies. Data from Refinitiv's monthly report showed that the Middle East's January exports at 2.4-2.5 million tonnes were down from 2018's monthly average of up to 2.8 million tonnes.
The report added that Middle Eastern exports could remain under pressure due to refinery maintenance. Buyers in the meantime continued to pick up March cargoes, with Japan's Showa Denko looking to buy the fuel this week. Asia's gasoline crack persisted at its lowest since November 2011, this time at a discount of $2.85 a barrel to Brent crude versus $2.51 during the previous day.
Supplies across regions from Asia to Europe and the United States were abundant. The latest data from Japan also showed its gasoline inventories were on the rise. Days after a fireball erupted near the Mexican town of Tlahuelilpan, killing at least 117 people pilfering gasoline from a pipeline, the area's fuel bandits were back in business.