20 September 2013 15:42 [Source: ICIS news]
LONDON (ICIS)--Spot trading in the European methyl tertiary butyl ether (MTBE) market will increase once summer-spec gasoline has ceased trading next week, market sources said on Friday.
The European gasoline market is in a transitional phase, with both summer- and winter-spec material trading concurrently, but summer-spec material is scheduled to cease trading next week.
As a gasoline additive, the value of MTBE relative to gasoline is often considered more important than its absolute price. But having both grades of gasoline, which are differently priced, actively traded makes assessing this relative value difficult.
For much of this year, MTBE prices have been fairly flat, “which is good for producers and consumers, but maybe frustrating for traders, as they can’t take a position so easily,” said a producer. As a result, the spot market has been fairly inactive, by normal standards.
MTBE prices decreased both this week and last, which might have been assumed to create trading opportunities for traders and so increase spot activity.
But both producers and traders said this would not happen until next week when summer-spec gasoline ceases trading, and greater clarity over the value of MTBE relative to gasoline is possible.
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