Asia's naphtha price was at a five-week high on Friday while cracks slipped to end the week at a two-session low, snapping gains that lasted for five straight sessions.

Bears said there were not enough bull factors to sustain the strength seen in the last few days as fundamentals were still weak.

"The market was trending up for about a week, but supplies in Asia are generally still long. There are quite a fair bit of cargoes coming out of the Gulf," said a trader.

Other than South Korea, buying interest from Taiwan and Japan was limited.

GS Caltex bought a cargo for second-half August arrival, while Samsung Total bought a cargo for first-half August arrival at a discount of $1.00 a ton to Japan spot quotes on cost-and-freight (C&F) basis.

Although the discount was narrower compared with around $3.00 a ton discount for deals done between June 30 and July 5 in South Korea, a contango still reflected a weak market.

With China having hiked interest rates for the third time this year on Wednesday, concerns over how that would batter the already weaker plastics demand than before continued to build.

"Higher crude costs, slower industrial production in China, new refining capacity coming onstream and questions about the strength of consumer demand in the developed world for the upcoming festive season may combine to knock naphtha's crack spread," said Reuters columnist Clyde Russell.

Traders were also not convinced that naphtha strength in the West would last as summer driving season in the U.S. will end soon.

"The West looks relatively strong at the very front end, but from mid-July, I expect that there will be plenty of supplies," said a Western trader.
Gasoline cracks recovered to a two-session high from a five-session low, as sentiment remained strong on healthy demand from the region and the West.

Gasoline stocks at Europe's ARA hub fall to 699,000 tons

from 703,000 tons last week-oil said analyst Pietr Kulsen.

This came after U.S. gasoline inventories fell 634,000 barrels to 212.54 million barrels, versus analysts' projections for a 100,000-barrel build.

• Swaps Outrights (CFR Japan): July swaps rose $33.00 to $994.00 a ton, while August swaps increased $33.25 to $996.50 a ton.

• East-West Spreads (The differential between CFR Japan swaps and Northwest Europe swaps): Asia's July swaps were $3.25 a ton higher than Northwest European values versus $6.00 a ton higher from the previous session.

• Swaps Cracks: Discounts on crack spreads widened $1.29 to $8.60 a barrel to Brent crude.

• Japan Open-Spec Naphtha: The price for front-month second-half August rose $24.00 to $984.00 a ton, highest since June 1 at the same level.

• Backwardation/Contango: The intermonth contango between second half August and second-half September widened by half to $1.00 a ton.

• Crack Spread: Cracks - the profits or losses of refining Brent crude into naphtha - slipped $3.15 to $99.30 a ton premium, lowest since Wednesday at $99.03 a ton.

• Naphtha Tenders: Kuwait Petroleum Corp sold some 100,000 tons of full-range naphtha and nearly 50,000 tons of light naphtha for first-half August loading at around premiums of $11-$12 to two buyers.

- IOC offered 35,000 tons for early August loading from Dahej and 15,000 tons for July 28-30 loading from Haldia in a tender due to be awarded next Thursday.

-  It had earlier cancelled to sell the Haldia cargo for July 21-23 loading.

• Naphtha Cash Deals: Shell bought a second-half September cargo from Cargill at $986.00 a ton, making this the only cash deal for the day.

• Reforming Margins: Gasoline's premium to naphtha recovered $1.22 to $19.04 a barrel, highest since June 5 at $19.80 a barrel.

• Gasoline Cracks: Cracks - premiums/losses obtained from refining Brent crude into gasoline - recovered 28 cents to $8.14 a barrel, highest since Wednesday at $8.37 a barrel.

• Gasoline Cash Trades: Four deals, of which Vitol sold one and bought two cargoes.

-  It bought two 92-octane cargoes for Aug. 3-7 loading at $126.10 a barrel each from Arcadia and Trafigura.

-  It sold a 97-octane cargo to Shell for July 30 to Aug. 3 loading at $131.30 a barrel.

-  Shell bought another 97-octane cargo, but from Morgan Stanley for Aug. 3-7 loading at $130.90 a barrel.