27 August 2012 10:58 [Source: ICIS news]
The naphtha crack spread versus October Brent crude futures strengthened to $130.55/tonne (€104.44/tonne), the highest since 25 April, according to ICIS data.
“The front-month [naphtha] oversupply is being cleared,” said a trader.
Open-spec naphtha prices surpassed the $990/tonne mark, closing $12 higher than the session on Friday to $991-993/tonne on Monday, ICIS data showed.
The intermonth spread between the first half of October and the first half of November contracts widened to a backwardation of $9/tonne – the strongest since 20 July, the data showed.
On 24 August, the crack spread was at $120.43/tonne while the backwardation was at $8/tonne.
South Korean crackers are actively buying spot naphtha supplies because they are running their plants at high rates, and prices of alternative propane feedstock make naphtha a more attractive option, traders said.
In physical trading, Glencore sold a second-half October open-spec cargo to Vitol at $987/tonne. Glencore also sold the spread between the first-half October and first-half November contracts to Vitol at $9/tonne, traders said.
($1 = €0.80)
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