20 May 2008 12:10 [Source: ICIS news]
LONDON (ICIS news)--European open spec naphtha cargoes were bid and offered at more than $1,000/tonne (€640/tonne) and paper trades done at $1,007/tonne on ongoing crude strength, market players said on Tuesday.
A European trader confirmed on Tuesday morning that European naphtha swaps had been traded over $1,000/tonne CIF (cost, insurance and freight) NWE (northwest Europe) and the trader reported she had just bought at $1,007/tonne.
The developments bring physical material to around $1,007-1,009/tonne CIF NWE based on the front-month June crack spread, which was reported at -$12.30/bbl to -$12.00/bbl relative to crude.
Despite paper trades having been concluded over this psychological point, physical material had yet to be traded above $1,000/tonne.
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The naphtha market had been failing to keep up, seeing the crack spread move deeper and deeper into negative territory. A fortnight ago, the front-month crack spread fell to as low as minus $18/bbl.
One broker said that $1,000/tonne naphtha in
Another source added that just as crude had no limitations when it broke that barrier, now that naphtha has breached the $1,000/tonne mark its psychological barrier had been broken.
"The next step is to see a public trade at or above $1,000/tonne and then the next barrier would be further down the line. No-one would think, I can’t buy above or offer above this value," the source said.
Traders noted plentiful material in
European refiners had been exporting gasoline to the
($1 = €0.65)
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