Healthy regional demand for 95 RON gasoline amid tight octane booster supply sent the FOB Singapore 95/92 RON gasoline spread soaring to a near 16-month high Tuesday, keeping prices and sentiment in the Asian gasoline market buoyed, according to market sources and S&P Global Platts data.
The 95/92 RON gasoline spread saw its largest day-on-day jump since December 2016 at the Asian close Tuesday, widening by 94 cents/b day on day to $3.51/b, Platts data showed.
The spread was last wider on April 13, 2018 at $3.53/b.
Singapore 95 RON gasoline was assessed at $69.79/b Tuesday, while 92 RON gasoline was assessed at $66.28/b.
The recent strength in 95 RON gasoline was attributed to steady, robust demand for the grade, especially from Southeast Asia, market sources said.
Vietnam's Petrolimex and Thailand's PTT were each heard to have recently sought 30,000 mt of 95 RON gasoline for mid-August, while Sri Lanka's Lanka IOC was seen seeking 8,000 mt of 95 RON gasoline for delivery over September 23-24 into Colombo.
In addition, supply of blendstocks such as MTBE and toluene has been tightening, underpinning prices for higher octane gasoline.
The tightness was partly due to the heavy outflow of reformate and blendstocks westwards in July, compounded by increasing domestic demand in China for MTBE and toluene from blenders, sources said.
"There is quite good value for blending now," one gasoline trader said.
Inventories of toluene in China have been drawn down substantially, with stock levels falling a sharp 21.75% week on week to 33,100 mt as of July 26, Platts reported earlier. Gasoline blenders in the Far East blend toluene and MTBE with low octane gasoline to make higher octane grades.
"Short term-wise, the gasoline market is still looking good. Strong driving demand has supported the market and together with less availability of blendstocks, prices [for higher octane grade gasoline] are being pushed higher," a second source said.
Like the 95/92 RON gasoline spread, the 97/92 RON gasoline spread hit a near two-year high of $5.46/b on July 26. It was last higher on September 15, 2017 at $5.57/b, Platts data showed. The 97/92 RON gasoline spread has since narrowed to stand at $5.14/b Tuesday.
