19 November 2013 15:49 [Source: ICIS news]
LONDON (ICIS)--The European naphtha differential over ICE Brent crude oil futures fell week on week to minus $5.20/bbl on Tuesday, from a yearly high, as market participants deemed high-volume exports to Asia to be 'a bit overdone'.
The Asian arbitrage had opened after months of being shut, and driven the strength in the naphtha differential over Brent crude.
"1.6 million tonnes are being exported in November. Its been a bit overdone," a naphtha trader said.
Asian markets have received too much product for buying appetite to persist, a naphtha buyer said.
"There were many cargoes going to the East and many ships were being fixed but nobody knows if it will continue. So there is doubt in the market," the buyer said.
Over the past couple of weeks, Europe has exported a minimum of 1,484,000 tonnes of naphtha to the Asia-Pacific region, ICIS shipping data revealed.
The volumes for the week ending on 8 November were the highest single-week fixtures the market has seen in a long time, and had helped support a bullish sentiment in the naphtha market.
The differential - or the 'crack spread' - was at at a record high for 2013 at minus $3.95/bbl on Tuesday 12 November, as exports to Asia continued at exceptionally high volumes.
($1 = €0.74)
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