07 October 2010 16:24 [Source: ICIS news]
LONDON (ICIS)--European naphtha cargo prices have reached their highest weekly average for over five months, driven by healthy demand from the petrochemical sector, high crude oil prices and the ongoing strike at the Fos-Lavera port in France, traders said on Thursday.
Naphtha prices on Thursday morning stood at $766-774/tonne CIF (cost, insurance and freight) NWE (northwest ?xml:namespace>
The average price so far this week was $753/tonne. Based on ICIS assessments, this was the highest weekly average since the end of April.
Market participants cited a number of reasons for the rise in the price of naphtha.
The rolling strike at the Fos-Lavera oil terminal in southern
With shipping traffic having been blocked from entering or leaving the port, as well as uncertainty regarding how long shipments could be delayed, the effects on the oil and chemical industries have been significant, according to market sources.
Demand from the petrochemical industry has been very strong this week, further bolstering naphtha prices.
According to a broker, with the price of the alternative feedstock liquefied petroleum gas (LPG) having increased considerably as demand grows for heating fuel, naphtha is currently viewed as a more viable option.
Finally, gains in the price of crude oil, driven by a weaker US dollar, helped boost naphtha prices.
According to a buyer, further increases were not out of the question, but it was not possible to predict how long these gains could continue.
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