Europe naphtha cargo prices climb as US arbs open

14 September 2007 11:32  [Source: ICIS news]

LONDON (ICIS news)--Prices for European open spec naphtha cargoes have climbed steadily to around $690/tonne as arbitrage options to the US have opened, traders said on Friday.

 

At least two-to-three large range 2 (LR2) tankers have already been fixed to the US, traders said.

 

Each tanker was expected to be carrying 80,000-159,999 tonnes of naphtha from the Red sea and Mediterranean.

 

Traders said that the material was more than likely to enter the gasoline pool.

 

One Europe-based naphtha trader said the fixtures more than likely took place on Wednesday this week when European cargoes jumped by around $15.00/tonne.

 

Open spec naphtha cargoes were assessed in a $688-694/tonne CIF (cost, insurance and freight) NWE (northwest Europe) range, $24.00/tonne higher than prices one week ago, according to global chemical market intelligence service ICIS pricing.

 

Traders said demand in the market was improving and the October crack spread was quoted at a $1.40/bbl premium to Brent crude. 

 

According to the Energy Information Administration (EIA), gasoline stock levels in the US were at their lowest since 2 September 2005, so it appeared more feasible for a Europe-to-US gasoline arbitrage window to relieve US shortages.

 

However, this was deemed impossible as US producers were seeking summer spec material and European producers have already switched to winter spec gasoline production, sources said.

By: Kawai Wong
+44 20 8652 3214

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly