28 January 2011 17:47 [Source: ICIS news]
LONDON (ICIS)--Naphtha oversupply in Europe has pushed down crack spreads and allowed the arbitrage to ?xml:namespace>
With the current low level of buying interest from European petrochemical buyers, naphtha supplies have risen and crack spreads dropped to allow traders to move excess product to
One trader said that the arbitrage to
It was understood that a number of February loading cargoes destined to
The crack spread on Monday 24 January was around minus $2/bbl (minus €1.46/tonne), dropping during the week to around minus $3.70/bbl on Friday 28 January.
The trader said that at one point the crack spread reached minus $4.10/bbl before recovering.
Naphtha flat prices have dropped from a range of $844-852/tonne CIF (cost, insurance, freight) NWE (northwest
The reason why the petrochemical industry was not showing interest was because most companies were using their high inventories of naphtha, the trader said.
Moreover, as the alternative feedstock, butane, dropped in value, petrochemical companies were substituting it for naphtha where possible, said another source.
Naphtha sellers however found extra demand not only from Asia but from gasoline blenders which also allowed the arbitrage to the
($1 = €0.73)
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