Europe benzene nears record as crude surges

14 February 2008 18:08  [Source: ICIS news]

LONDON (ICIS news)--Europe benzene values approached record highs on Thursday as energy complex pressure combined with perceived market tightness to drive offers up to $1,200/tonne.

Market participants gave bid/offer indications of $1,180-1,200/tonne (€1,710-1,739/tonne) CIF (cost, insurance and freight) ARA (Amsterdam, Rotterdam, Antwerp) for February material, up $23/tonne from the last deal at $1,157/tonne.

This was $25/tonne off the record high deal of $1,225/tonne CIF ARA, recorded on 23 April 2007 for a May deal.

“We are very close to previous highs,” said one trader, adding that if crude values increased or further market tightness was seen, a deal above the now-symbolic $1,200/tonne mark could well be done this week.

March Brent was at $95.05/bbl at 17:00 GMT, up $1.73/bbl from the open.

Having earlier posted gains of more than $2/bbl, when US natural gas stocks showed a larger than expected draw, Brent had eased back a little from a peak of $95.49.

Other market participants said that the market was being driven by sentiment, with February supply perceived as being tight and talk that March and April would be tighter yet on production issues.  

“I don't see a good reason for it moving that fast again, but two players came into action and everyone woke up,” said a source at one major producer.

Benzene indications for February closed at $1,185-1,895/tonne CIF ARA.

($1 = €0.69)

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Author: Peter Salisbury
+44 20 8652 3214

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