US Gulf naphtha spot volatility rises with few active players

15 December 2011 17:41  [Source: ICIS news]

HOUSTON (ICIS)--US Gulf naphtha spot trading has been marked by volatility in a thinning market nearing the end of 2011, said naphtha traders on Thursday.

Heavy naphtha has traded at a range of 1 cent/gal under Gulf coast spot regular gasoline to a premium of 2.75 cents/gal since 6 December.

Naphtha trades at a premium or discount to US Gulf spot regular unleaded gasoline on the Colonial Pipeline. The absolute spot price for naphtha has ranged from $2.4525-2.6025/gal since 6 December.

Few parties have unfulfilled contracts or immediate deadlines to meet, which has kept the market relatively thin, traders said.

A refiner with a prompt need to sell or buy naphtha comes to the market with a disadvantage, market sources said.

In order to buy prompt naphtha, the party has to be willing to pay more as the selling party strengthens its offer. If the need is to sell naphtha immediately, the party has to weaken the offer’s value to attract a buyer.

This has caused the near 4-cent/gal fluctuation in spot trading.

By: Sheena Martin
+1 713 525 2653

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