The front-month CIF Northwest Europe naphtha crack has peaked to an 18 month high, driven by strength in the Asian naphtha market and the ongoing downtrend in crude futures, as per sources in Platts. The crack -- naphtha's value against crude -- was assessed at minus US$2.85/barrel Monday, up from Friday's close of minus US$3.45/bbl. The last time the front-month naphtha crack was assessed higher was December 24, 2012, when it was minus US$2.60/b. Around midday London time Tuesday, the balance-month CIF NWE naphtha crack was pegged around minus US$1.20/b, up from minus US $1.95/b Monday, and the front-month crack was seen trading around minus US $2.20/barrel.
Cracks are rising in line with the Asian strength, and falling crude prices. The arb to Asia is wide open from the Med but in Northwest Europe, the physical naphtha market is long, oversupplied. A lot more product is going from Europe to the East, but no naphtha fixture from NWE to Asia is seen. At the Asian close Monday, the CFR Japan H1 September naphtha crack versus September ICE Brent futures was hovering at a six-month high of US$161.33/mt. The crack was last higher on January 13 when it was US$164.68/mt, according to Platts data.
16-Jul-14 
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