In line with runaway crude prices, naphtha prices have peaked to all time highs past US$1070/MT.US July crude futures have breached US$135 a barrel in Asian trade.
Runaway crude prices can be attributed to high inflation rates being witnessed globally, start of summer driving season in USA exerting pressures on gasoline demand coupled with an unexpected drop in US inventory levels this week. The other factors affecting crude prices are supply concerns caused by increased Chinese demand for crude oil and its products ahead of the Olympics, weakening US dollar, high price forecasts by analysts, and refusal by OPEC to hike output until September.
As per ICIS, downstream Asian naphtha trades broke a new historical record high of US$1071/ton with Sempra's sale of H2-July contract to Shell. Asian naphtha opened with H1-July prices indications pegged at US$1112.50-1,115.50/ton CFR Japan, and H2-July at US$1110.50-1113.50/ton.