HOUSTON (ICIS)--US methanol spot barge prices dropped 5% this week following the ongoing plunge in oil prices.
Crude fell below $60/bbl at one point during Friday morning trading, bringing benchmark West Texas Intermediate (WTI) down more than $16/bbl since early October for a drop of 21%.
Methanol historically tracks oil, as the chart below shows. US spot methanol has dropped from its yearly high of 131 cents/gal in mid-October to 118 cents/gal this week, a 10% drop.
Since early June spot methanol has been a roller-coaster ride. The index dropped to its low for the year in late July after the new OCI Natgasoline plant in Texas began operating, then shot up in tandem with higher prices in Europe and Asia to a new year-to-date high in mid-October.
Before crude plunged, methanol’s move up appeared to be following a seasonal trend from higher natural gas prices, which have increased almost 16% in the the past month.
While natural gas is the major feedstock for methanol producers in the US, the major feedstock in other global regions is crude.
Major US methanol suppliers include Methanex, Southern Chemical, Celanese-Mitsui, LyondellBasell and OCI.