Naphtha prices in Europe plunged to levels near US$600/ton last week amid low upstream Brent crude oil futures as per ICIS data. Prices recovered briefly during mid-week on the possibility of good demand, but fell again later on amid low liquidity, driven back down by a further drop in Brent. ICE Brent crude oil futures declined steadily from US$83.28/bbl on Monday to US$79.21/bbl on Thursday. Naphtha traded at a low of approximately US$612/ton CIF (cost insurance freight) NWE (northwest Europe) early in the week, before rebounding to US$629-632/ton on Wednesday evening in the open market.
There was uncertainty over potential demand as mixed views emerged. A rally in the related US rubbers market would support US gasoline demand, a trader noted, adding it could fuel demand for European naphtha which is used as a blendstock in gasoline exported to the US. However, another trader doubted US gasoline strength would lead to any substantial increase in naphtha demand. Prices also rebounded on a widening Asian arbitrage. The east-west price spread was at US$38/ton for December, compared with US$35/ton for November last week.
17-Nov-14 
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