US spot methanol rises 5 cents/gal on higher crude prices

02 March 2011 22:59  [Source: ICIS news]

HOUSTON (ICIS)--US spot methanol jumped 5 cents/gal on Wednesday because of the rise in crude prices, according to methanol market sources.

Spot barge prices for US methanol increased to 112-114 cents/gal, compared with 107-109 cents/gal on Tuesday, sources said.

The move followed NYMEX front-month WTI crude futures, which closed at $102.23/bbl - the first time since September 2008 that oil has finished above $100/bbl.

Methanol historically has followed crude pricing, though oil prices have shot up by a greater margin so far this year.

Since early January, crude futures have increased 14%, from $89.38/bbl to $102.23/bbl on Wednesday. Spot methanol has moved up 6%, from an average of 106.5 cents/gal to an average of 113 cents/gal.

Sources said the severe US winter weather this year boosted demand for methanol, which is used in antifreeze and windshield wiper fluid.

A market source said this week that the usual March demand dropoff would likely be delayed until April because of the harsh weather.

($1 = €0.73)

For more on methanol visit ICIS chemical intelligence

By: Lane Kelley
+1 713 525 2653

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