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Europe naphtha weekly trading activity sluggish on poor demand

ICIS News : 4-Oct-13 17:40

LONDON (ICIS)--The pace of naphtha trading activity in the open market platform has dwindled, with buyers purchasing six cargoes this week compared with eight during the previous week, sources said on Friday.

Sales are also poor in comparison with the first week of September when sellers closed 16 cargo deals. September trading activity had been heavy with a total of 40 cargoes purchased in the window, ICIS data shows.

Trading firm Vitol and oil major Shell both bought and sold cargoes this week, while Glencore bought one cargo and BP sold a cargo. Morgan Stanley entered the market later on in the week to purchase two cargoes, one of them from Litasco.

The naphtha cargoes are due to load around 15-20 October, with the exception of one cargo that is due to load around 20-24 October.

Meanwhile, the October naphtha crack spread dropped steeply on Monday as traders shifted their trading position ahead of October sales. The crack slipped from minus $7.65/bbl last Friday evening to minus $8.80/bbl on Monday evening.

The crack continued to suffer through the week from a fall in buying appetite from the key Asian market, after last week's brief re-opening of the arbitrage window.

Tighter naphtha supply from European refinery run cuts have been more than offset by the downstream cracker maintenance season. 

In addition, supply is rising on the back of a closed arbitrage to Asia, and slow gasoline blending demand from the US.

($1 = 0.73)

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