17 July 2013 14:58 [Source: ICIS news]
LONDON (ICIS)--The European naphtha crack spread has weakened on the back of a slight dip in gasoline blending demand, industry sources said on Wednesday.
The August naphtha crack spread weakened from minus $7.75/bbl on Tuesday evening to minus $8.30/bbl late on Wednesday morning.
A crack spread is the price difference between crude oil and naphtha, calculated in US dollars per barrel.
The dip in gasoline demand has been described as a trough in a “wave of demand” as buying appetite fell from last week’s peak.
A rise in the value of mandatory blending component ethanol RINs [Renewable Identification Numbers] in the US has been the cause of much of the slowdown, with buyers having to cut back on additional gasoline imports.
However, northwest European gasoline demand is faring much better than a couple of weeks ago.
“The situation is still better than two weeks ago, when we had distressed cargoes. There are no distressed cargoes at the moment,” a trader said.
Several refinery outages in Texas and in the East Coast has raised expectations there will be more buyers for European gasoline than there have been for weeks.
Last week, naphtha prices received a boost from improved demand from the gasoline blending sector, which pushed prices up above the $900/tonne northwest Europe (NWE) CIF (cost, insurance & freight) mark.
($1 = €0.76)
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