22 March 2012 20:10 [Source: ICIS news]
HOUSTON (ICIS)--Look for April US methanol contracts to continue the trend of the past two months with a rollover, most sources said on Thursday.
“With crude being as high as it is, the price should roll,” a methanol buyer said.
A rollover in April would repeat monthly postings of 133-134 cents/gal during February and March by producers Methanex and Southern Chemical. The two producers historically have set the monthly contract range.
Methanol tends to track crude prices over the long haul, but the spread between contract and spot prices also gets a lot of attention.
One rule of thumb as to the relationship between methanol spot and contract values is that spot usually represents a 15-17% discount of the contract price.
Such a discount would set a range of about 111-114 cents/gal. Spot barge prices on Thursday were 113.50-114.00 cents/gal, roughly where they have lodged for most of this year.
NYMEX front-month futures for West Texas Intermediate crude fell about 2% to $105.35/bbl from $107.27/bbl a day earlier.
Only one buyer expected a drop in April.
“There’s been no major supply interruptions out there,” the buyer said. “I think there’s strong support for a decrease. We may not get it, but the logic is there.”
($1 = €0.76)
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections