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Crude oil slump could linger like 1986’s decline

Focus Weaker oil price erodes ethane cost advantage over naphtha

LONDON (ICIS)--Declining crude oil prices have eroded but not fully destroyed the cost advantage of ethane over naphtha, according to recent industry analysis.

 The advantage of Henry Hub natural gas price over WTI crude oil futures has shrunk from approximately $15/mmbtu in July 2014 to less than $5/mmbtu, according to Paul Harnick, head of chemicals at KPMG.

“Falling crude prices have eroded but not completely removed the massive cost advantage previously enjoyed by ethane over naphtha,” Harnick said.

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