22 May 2008 12:54 [Source: ICIS news]
LONDON (ICIS news)--European open spec naphtha surged to a range of $1,080-1,085/tonne (€680-684/tonne) on Thursday with the June crack spread remaining steady and crude oil hit values around $135/bbl, traders said on Thursday.
Traders reported a crack spread at -$12.80/bbl to -$12.60/bbl, similar to Wednesday’s quote at -$12.80/bbl to -$12.30/bbl.
Refined products were now catching up with crude oil and the market was now clearly in a contango, traders said.
Driving this latest surge in crude oil futures was an unexpected 5.4 million bbl decrease in US crude stocks. Market analysts originally forecast a modest gain by around 600,000 bbl.
Brokers added that despite naphtha surging significantly this week, the market was still underpinned by a weak physical market with a lack of support.
The gasoline sector, which is key to supporting the naphtha market, remained abundantly supplied on both sides of the ?xml:namespace>
With high stocks in the
A gasoline broker reported the June gasoline crack spread around $1.80/bbl relative to Brent crude. Although this was in positive territory, the broker noted that values one year ago pre-summer driving season was around $20-26/bbl.
There was also less supprt from Asia as the
Traders claimed that the $35-40/bbl spread in regional values made the arbitrage window viable on paper, but shipowners were reluctant to send vessels east and return empty.
($1 = €0.63)
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