28 August 2013 13:42 [Source: ICIS news]
LONDON (ICIS)--Europe naphtha is trading at six-month highs on the back of a spike in upstream ICE Brent crude oil futures and a strong crack spread, industry sources said on Wednesday.
Naphtha prices were assessed at $965-967/tonne (€724-725/tonne) CIF (cost, insurance & freight) NWE (northwest Europe) late on Wednesday morning.
On Tuesday, naphtha traded at $958/tonne CIF NWE, close to levels last seen in February, as BP sold a cargo to trading firm Glencore.
Moreover, the naphtha crack spread, at minus $6.75/bbl, remains strong at one of the highest levels this year, indicating a sustained bullish sentiment in the market.
Tightening supply is driving the strength in the naphtha market, according to market sources.
Naphtha is harder to obtain as the market prepares for the upcoming autumn refinery maintenance season, the shutdown of a condensate splitter unit at the Skikda refinery in Algeria in mid-September, and additional refinery run cuts in the Mediterranean as a result of poor margins.
Independent stock data published last Thursday revealed naphtha stock levels at the Amsterdam-Rotterdam-Antwerp hub had fallen to lows seen six months ago.
A crack spread is the price difference between crude oil and naphtha, calculated in US dollars per barrel.
($1 = €0.75)
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