Asia naphtha profits rise to three-week high

Profits from making naphtha in Asia rose to the highest in three weeks on signs European exports of the fuel are falling. Processing losses from fuel oil were at the widest in two months.

Japan naphtha swaps for March climbed $12.25, or 1.2 per cent, to $1,049.25 a metric tonne at 10:29 am Singapore time, the highest since May, according to data from PVM Oil Associates Ltd, a broker.

The benchmark naphtha’s premium to London-traded Brent crude futures rose to $136.28 a tonne from $120.41 on Tuesday. The crack spread, a measure of refining profitability from the fuel, was at the widest since Jan.uary 31.

European shipments of naphtha to Asia may fall 36 per cent in February, the second month of declines, according to a Bloomberg News survey of six traders and shipbrokers on February 16.

Singapore fuel oil’s discount to Dubai crude, a measure of refining losses from the fuel in Asia, widened 25 cents, or 4.4 per cent, to $5.98 a barrel, PVM data showed. That’s the biggest discount since December 12.

High-sulfur fuel oil swaps for March rose $8, or 1.1 per cent, to $730.50 a tonne.

The premium of 180-centistoke fuel oil to 380-centistoke grade fell to $10 a tonne from $10.50 onTuesday. This viscosity spread has narrowed $1.75 so far this month, signaling that prices of marine fuel grades have risen more than power generation grades.

Singapore gasoil’s premium to Dubai crude gained 42 cents, or 2.6 per cent, to $16.39 a barrel, rising for a second day, PVM data showed.

Gasoil, or diesel, swaps for March rose $1.90, or 1.4 per cent, to $134.75 a barrel, PVM data showed.

Jet fuel traded at a premium of 15 cents above gasoil, the first time in more than five weeks that the spread has been positive. Aviation fuel was at a discount of $1.05 to diesel on January 31, the widest negative spread in more than three and a half years.