LONDON (ICIS)--Europe naphtha prices have continued the downwards spiral as crude oil futures touched new lows amid limited relief from the ongoing price war rout and the coronavirus pandemic.
Prices have touched lows not seen since November 2008, before the the financial crisis-induced global recession.
European naphtha spot prices fell 9% on Monday afternoon to $238/tonne CIF (cost, insurance, freight) northwest europe (NWE), down from Friday's close of $260.50/tonne.
Naphtha was taking a hit from crude oil prices, with the international referential Brent for deliveries in May at $30.67/bbl in European afternoon trading, down $3.18/bbl from Friday's close, a decrease of 9.3%.
Following the uncertainty around the crude oil price war started by Saudi Arabia and growing concerns over the global coronavirus pandemic, naphtha's supply and demand has been disrupted, impacting trades and economies worldwide.
Naphtha crack spread last week was swinging between as low as -$4.20/tonne to as high as -$7.15/tonne for May, according to sources.
This was linked to volatility in the upstream crude values, while gasoline crack for April entered the negative zone at lows of -$1.55/tonne last week.
The coronavirus is now spreading fast across Europe and is likely to hurt downstream demand as normal economic activity is disrupted by government measures to reduce the speed and level of transmission.
Some countries have declared complete quarantines, like Italy and Spain, while others have imposed travel bans or border closures as a precautionary measures.
Markets' woes however keep growing as the infection rates continue rising in Europe and the US, despite concerted action by major central banks over the weekend to inject liquidity in the markets.
Front page picture: Markets and commodities
took another battering on Monday
Source: Justin Lane/EPA-EFE/Shutterstock