A contango structure typically reflects oversupply.
Malaysia's Pengerang Refining and Petrochemical (PrefChem), which in June had imported naphtha for its new 1.2 million tonnes per year cracker, is now exporting the fuel.
It has exported at least two naphtha cargoes, one of which was for late August loading to a trading house. Another cargo for early September loading was sold to oil major BP at discounts in the high teens a tonne level to Japan quotes on a free-on-board (FOB) basis. It may continue to offer naphtha given that its 300,000 bpd refinery is in operational mode, but the status of its cracker is not immediately clear.
Petronas, co-owner of PrefChem with Saudi Aramco, did not immediately respond to a request for comment. India's HPCL sold 30,000 tonnes of naphtha for September 13-15 loading from Vizag at premiums close to $10 a tonne to its own price formula on a FOB basis. Nayara Energy has sold up to 35,000 tonnes of the fuel for September 24-28 loading from Vadinar at premiums of $12 to $13 a tonne to Middle East quotes on a FOB basis.
Bapco has sold up to 75,000 tonnes of naphtha for first-half November loading from Sitra at levels around the mid-teens a tonne premium to Middle East quotes on a FOB basis.