Europe naphtha demand from gasoline sector recovers

14 January 2011 16:50  [Source: ICIS news]

LONDON (ICIS)--The European naphtha market has seen demand return from the gasoline-blending sector following a 12-week lull, sources said on Friday.

A recovery in gasoline prices and a fall in naphtha values improved blending economics, resulting in an increase in demand for naphtha from the sector.

“October was our last naphtha sale to gasoline blenders,” said one trader.

The trader said that there was no demand because naphtha was much more expensive than gasoline.

Gasoline prices have largely been supported by an increase in demand from both west Africa and the US, market participants said.

It was thought that demand from the gasoline sector might persist for at least a few weeks, particularly as the US was believed to be short of gasoline.

At 12:00 GMT on Friday, the weekly range for gasoline was at $834-868/tonne CIF NWE, while naphtha was at $850-867/tonne.

Last week, the range for gasoline was at $816-858/tonne CIF (cost, insurance and freight) NWE (northwest Europe), while for naphtha it was $854-871/tonne CIF NWE.

Naphtha is used as a feedstock for gasoline blending.

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By: Jo Pitches
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