05 April 2012 15:39 [Source: ICIS news]
LONDON (ICIS)--The European naphtha cargo market has tightened considerably because of healthy demand from the gasoline sector and reduced supplies, sources said on Thursday.
“Prompt [the market for prompt naphtha] is tight, particularly the Mediterranean,” a buyer said.
“Gasoline [demand] is strong, there’s refinery maintenance, works in Algeria ... There’s less [naphtha] coming into Europe,” it added.
“Gasoline demand is good,” a producer said. “The market is definitely tight. There’s less [naphtha] from Russia [entering Europe].”
“Gasoline [demand from the gasoline sector] is strong. The gasoline-naphtha spread is around $105/tonne (€80/tonne). Yes, the market is short,” a trader said on Wednesday:
The higher gasoline is priced above naphtha, the greater the incentive is to purchase naphtha for gasoline blending.
By Thursday afternoon, the price spread between premium gasoline and naphtha was around $135/tonne.
Demand for naphtha is expected to remain robust as the forthcoming driving season increases requirements for gasoline.
The naphtha market is therefore likely to stay tight for at least the next couple of weeks, particularly while refinery maintenance is ongoing.
($1 = €0.76)
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