Energy markets bounce back up

13-Feb-14

Brent for March settlement was also close to the US$110/bbl threshold on the London-based ICE Futures Europe exchange. Brent futures gained almost 4% when compared to the beginning of the year. According to analysts, the recent gains in energy markets have been stimulated by the anticipations of shrinking distillate stockpiles including heating oil and diesel due to the unusually cold winter in the US as per the pricing service of ChemOrbis. The Energy Information Administration is expected to report lower stocks for another week on Wednesday. Following suit, spot naphtha markets have posted some modest gains in Asia and Europe so far this week. Since the beginning of the year, spot naphtha prices in both regions had been easing gradually. However, players are concerned whether this firming can be sustained with support from crude oil since steam cracker turnarounds are resulting in poor demand for naphtha. According to ChemOrbis, in the downstream markets, players are closely watching the movements of energy prices. Weak demand conditions are mostly reported for PP, PE, PS and PVC in Asia and Europe, resulting in stable to softer trends. However, the recent gains of crude oil and naphtha are expected to taper off the recent downward pressure, some argue.