Naphtha remains firm, no gasoline demand
Dubai, August 27, 2011
The Middle East naphtha market firmed again this week, although trade was light, while gasoline demand remained weak and gas oil sentiment softened, traders said.
'The naphtha premiums are pushing slightly higher,' said one trader. 'But end users in Japan are still buying at the same levels so I don't see why people are paying for the free-on-board (FOB) barrels.'
Traders said tight supplies of gasoline were helping support sentiment in the market because anyone caught short would have to bid higher, but that there was no buying interest in a quiet market.
Fuel oil market sentiment was slightly softer on hopes that an Iranian fuel oil shortage -- driven by the country's temporarily heightened oil burning needs -- might ease as its gas fields ramp up output after maintenance.
'The Iranian situation seems a bit more relaxed,' one trader said. 'There seems to be less risk of continuing tight supply.'
At least two spot fuel oil cargoes from Iran, totalling about 120,000 tonnes for August-September loading, have been offered to a market that has been tight mainly due to well below average export volumes from the country for the last two months.-Reuters