Europe: The driving force in the European feedstock markets for the first quarter was volatility in Brent crude oil futures.
A price advantage led to rival petrochemical feedstock propane being favoured over naphtha towards the end of the first quarter.
However, early in May, the price spread between propane and naphtha started to narrow, and demand for naphtha revived somewhat.
The US driving season is expected to boost demand for European gasoline, and blending components such as naphtha.
However, gasoline requirements were less than in previous years, and the impact on the naphtha market was relatively modest.
Europe’s gasoil markets saw healthy demand in the first and early half of the second quarter due to winter heating demand.
Diesel markets have thrived in May because of good demand from the agricultural and transport sectors.
In turn, vacuum gasoil (VGO) – used to make many distillates – was healthy in May.
US: Ethane and propane spot prices traded out of the Mont Belvieu hub in Texas have been relatively stable since mid-February.
There have been very few major cracker shutdowns over the quarter, so prices have traded in the mid to upper 20s cent/gal range for ethane and mid to upper 90s cent/gal range for propane.
Ethane prices have mostly tracked the pattern of natural gas futures.
An unusually long winter has kept propane demand strong.
Normal butane and Iso-butane prices have mostly followed the price of gasoline.
The major factor affecting vacuum gas oil (VGO) as a refinery feedstock has been the spread between WTI oil and Brent crude, along with Louisiana Light Sweet crude that has followed Brent.
Updated to mid-May 2013