Rising naphtha prices in Europe heralding economic recovery?

19-Aug-09

Naphtha prices in Europe have sprung to ten month highs of US$645/ton on August 13. Naphtha makers in the continent have ramped up production rates. Naphtha for delivery into northwest Europe fell to more than six-year lows of US$235/ton in December, and as they nearly triple, they indicate a recovery in the economy. EIA data showed Energy showed that in the United States, feedstock inventories , including naphtha, had fallen for a fourth consecutive week to 158.2 million barrels, although they were still nearly 10% above last year’s levels. The government’s car scrappage schemes in the UK, Europe and USA aimed at reviving the ailing manufacturing sector could be one of the positive trigger points, as it could herald more genuine demand as it helps to kick-start the hard-hit manufacturing sector.