Australia's North West Shelf condensate prices could rise this month led by stronger naphtha and gasoline margins, as well as firm demand from key Asian buyers, market participants said.
Cash differentials for December-loading North West Shelf barrels, which would be trading in October, could move higher than the $1-$1.50/b discounts reportedly traded for November-loading cargoes in September, trade sources said.
A cargo of North West Shelf condensate, for loading over November 27-December 1, was last heard to have been sold by Shell to an unknown buyer at a discount of around $1.15/b to Platts Dated Brent crude assessments, S&P Global Platts data showed.
"Naphtha is still performing very well. Condensate would be quite supported because of positive naphtha cracks... NWS will do pretty OK this month," a Singapore-based condensate trader said.
Second month naphtha product swap crack spread versus Dubai crude swap averaged 77 cents/b to-date in October, much higher than the 20 cents/b average in September, and the highest since December 2017, Platts data showed.
"If naphtha crack continues to be strong, it will push up [the prices of] naphtha-rich condensate," a trader said.
Gasoline margins have climbed for the third consecutive month to-date in October to the highest since February 2020 -- the month before which the World Health Organization announced COVID-19 as a pandemic, and several countries impose travel and movement restrictions.
Second month 92 RON gasoline product swap crack versus Dubai crude swap averaged $4.27/b to-date in October, up from the $3.61/b average for the whole of September, Platts data showed.
"[Better] gasoline [margins] are supportive for light ends [grades]," a Southeast Asian crude and condensate trader said.
Second month 92 RON gasoline product swap crack versus Dubai swap averaged $5.61/b month-to-date, much higher than the multi-month low of $4.34/b in September, S&P Global Platts data showed.
The emergence of demand from key buyers in the Asian region could also support the condensate's price differentials, traders said.
Indonesia's Pertamina is seeking, on behalf of Trans Pacific Petrochemical Indotama, or TPPI, an unspecified volume of various condensate grades for delivery over Dec. 1, 2020-Jan. 8, 2021. The tender closes Oct. 8 and is valid until Oct. 12.
The delivery date range indicated in the tender could see all three North West Shelf condensate cargoes available for December loading offered into Pertamina's tender, traders said.
Japan Australia LNG (MIMI) Pty. Ltd., or MIMI, a 50:50 joint venture between Mitsubishi and Mitsui, will hold the first cargo for loading over Dec. 7-11, while Woodside will hold the second cargo for loading over Dec. 17-21, according to a trade source. The third and final cargo for December will be held by BHP for loading over Dec. 27-31.
Pertamina was last heard to have bought a November delivery cargo of North West Shelf condensate at Dated Brent around low-$1s/b, CFR, traders said.
