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Asia Naphtha/Gasoline-Naphtha margins at 3-week high

SINGAPORE, Oct 1 (Reuters) - The Asian naphtha price was at a two-session low of $973 a tonne on Monday but margins were up for the fourth session to reach a three-week high of $134.43 a tonne as strong gasoline demand in the West continued to support the market.

Naphtha can be reformed into gasoline or be blended with the automobile fuel other than being used as a petrochemical feedstock.

The strong gasoline demand in the U.S. and West Africa have likely caused Europe to cut back on its naphtha exports.

An estimated 400,000-450,000 tonnes of Western naphtha arriving this month in Asia reflected a sharp fall in its volumes when compared to 800,000 tonnes received in September.

"Naphtha is now driven by gasoline demand even though the summer driving season is over in the U.S. The U.S. is experiencing lower inventories because of supply disruption," said a Singapore-based trader.

It was unclear when Chevron Corp will be able to restart a crude unit at its 245,000 barrels per day (bpd) Richmond refinery in California following a fire in early August.

The plant accounts for one-eighth of California's refining capacity.

"Demand for European gasoline is equally strong as their cargoes are shipped to West Africa and not just to the U.S.," said the same trader.

These factors overshadowed the squeezed petrochemical margins and Formosa having to reduce operating rates at its 2.93 million tonnes per year (tpy) cracking complex to 80 percent of its capacity after a fire at a monoethylene glycol (MEG) unit operated by its sister company Nan Ya Plastics.

In Japan, top refiner JX Nippon Oil & Energy Corp has not restarted its 443,000 tpy naphtha cracker at its Kawasaki plant following a maintenance which started on Aug. 13.

The cracker was initially scheduled to resume operations in end September.

* NAPHTHA TENDERS: India's Reliance has sold 50,000-55,000 tonnes to Unipec for Oct. 25-30 loading at premiums slightly above $35 a tonne to Middle East quotes on a free-on-board (FOB) basis.

- Yemen's Aden Refinery sold 25,000 tonnes of light naphtha and another 25,000 tonnes of N+A grade to Glencore for Oct. 5-7 loading at premiums of about $40 a tonne to Middle East quotes on a FOB basis.

- This was Aden's second spot deal this year as it was forced to stop spot exports for at least nine months due to attacks on its oil pipelines.

* GASOLINE CRACKS AT 7-WK HIGH

Gasoline cracks were at a seven-week high of $12.79 a barrel supported by demand from Indonesia which will shut a secondary unit starting in late October which would affect its gasoline production.

Pertamina will shut an atmospheric residue hydro-demetallization unit at its 125,000 bpd Balongan refinery for 45 days.

The unit removes metals from residue oil, which can then be used as a gasoline feedstock.

The impending shutdown of the unit has led to a record import demand of 10.5 million barrels of gasoline for October delivery, traders said.

"Given that the unit will be shut for more than 40 days, their gasoline imports could still remain high for November," said a trader, adding that it was tough to fix an exact number.

* SINGAPORE CASH DEALS: Only one deal was done, and that was on gasoline where BP sold a 97-octane cargo to Shell for Oct. 23-27 loading at $132.30 a barrel.

LIGHT DISTILLATES CASH ($/T) ASIA Change % Change Prev RIC CLOSE Close OSN Naphtha CFR Japan M1 973.00 -5.50 -0.56 978.50 OSN Naphtha CFR Japan M2 960.00 -3.00 -0.31 963.00 OSN Naphtha Diff 13.00 -2.50 -16.13 15.50 Naphtha Netback FOB Sing 105.74 -0.61 -0.57 106.35 Naphtha Diff FOB Sing 1.69 -0.86 -33.73 2.55 Naphtha-Brent Crack 134.43 0.35 0.26 134.08 Gasoline 97 132.30 -0.09 -0.07 132.39 Gasoline 95 129.01 -0.09 -0.07 129.10 Gasoline 92 124.60 -0.70 -0.56 125.30 Gasoline crack 12.79 0.08 0.63 12.71 SWAPS ($/T) ASIA Change % Change Prev RIC CLOSE Close (0830 GMT) Brent M1 111.81 -0.78 -0.69 112.59 Naphtha CFR Japan M1 949.00 -8.00 -0.84 957.00 Naphtha CFR Japan M1/M2 11.00 2.00 22.22 9.00 Naphtha CFR Japan M2 938.00 -10.00 -1.05 948.00 Naphtha Japan-Sing Netback M1 -0.50 -10.70 -104.90 10.20 Naphtha Japan-Sing Netback M2 0.65 -11.80 -94.78 12.45 Naphtha FOB Sing M1 105.50 0.30 0.29 105.20 Naphtha FOB Sing M1/M2 1.35 0.10 8.00 1.25 Naphtha FOB Sing M2 104.15 0.20 0.19 103.95 Naphtha Cracks M1 -7.59 -0.33 4.55 -7.26 East-West Naphtha M1 5.00 0.50 11.11 4.50 East-West Naphtha M2 11.75 0.50 4.44 11.25 NWE Naphtha M1 944.00 -8.50 -0.89 952.50 NWE Naphtha M1/M2 17.75 2.00 12.70 15.75 NWE Naphtha M2 926.25 -10.50 -1.12 936.75 Crack NWE Naphtha-Brent M1 -8.89 -0.38 4.47 -8.51 Crack NWE Naphtha-Brent M2 -9.37 -0.56 6.36 -8.81 *Sing refers to Singapore

(Reporting by Seng Li Peng, editing by William Hardy)

((lipeng.seng@thomsonreuters.com)(+65 6870 3086)(Reuters Messaging: lipeng.seng.reuters.com@reuters.net))

Keywords: MARKETS ASIA/NAPHTHA GASOLINE