NWE naphtha cargoes at one-month low on poor regional demand, weak Brent

14-Jul-14

CIF Northwest European naphtha cargo prices have fallen to a one-month low as cracks fell on weak end-user demand and Brent crude futures extended their downward trend, market sources said in Platts. CIF NWE naphtha cargoes were assessed at US$935.25/mt Wednesday, downUS $7.25/mt day on day to the lowest level since US$926.75/mt on June 6, Platts data showed. Front-month ICE Brent fell to a 30-day low of US$108.50/barrel, on returning Libyan output. "There is weak demand in Northwest Europe, both from petrochemical end-users and from gasoline blenders. So, it makes sense that naphtha cracks weaken," a broker said. There is product available in tanks, and more product on offer, but the physical market is not very long. The problem is that the cargoes do not attract much buying interest." While gasoline blending demand was said to be sluggish in Northwest Europe, limited to very specific light grades of naphtha, there was little hope of increased demand from petrochemical end-users reportedly already running at high rates due to improved cracking margins. "The propane/naphtha spread is still very wide, so demand from petchems is not increasing nor likely to increase this month," a naphtha trader said.