23 February 2011 17:00 [Source: ICIS news]
On 22 February, the crack spread was around minus $5.95/bbl, having already weakened from minus $5.65/bbl the day before, in response to rising crude oil prices.
As Brent figures soared again on Wednesday over fears that the political unrest in ?xml:namespace>
In the oversupplied European naphtha market, there were persistent concerns that higher prices could have an impact on demand.
However, the further weakening of the spread was not sufficient to keep naphtha cargo prices in check.
On 22 February, the naphtha cargo range was at $900-908/tonne CIF (cost, insurance and freight) NWE (northwest
By 15:30 GMT on Wednesday, it had soared to $917-925/tonne CIF NWE, despite the softer crack spread.
“If crude keeps going up, the crack will have to come down further,” a market source said.
Responding to a question about how much further the crack spread was likely to fall, a trader recalled figures seen in 2008.
“In [the fourth quarter of 2008], crude had been $147/bbl and cracks got to minus $26/bbl.”
The situation was unlikely to be as severe this time, according to the trader.
“The market in petchems is far more robust than in the financial crisis,” the trader said. “But minus $10/bbl isn’t at all impossible.”
At 16:15 GMT, April Brent crude was at $110.08/bbl, up $4.30/bbl from the previous close.
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