US July benzene contracts jump nearly 40% on stronger crude and reopening economy

HOUSTON (ICIS)–US July benzene contracts settled nearly 40% higher from June, as spot values have increased with a resurgence in crude prices and a gradual reopening of the US economy.

July contracts, at $1.38/gal FOB (free on board) US Gulf, increased 39 cents/gal from 99 cents/gal in June.

Spot benzene prices rose month over month, tracking rebounding crude values after global oversupply concerns and coronavirus pandemic containment measures just months prior drove energy costs and derivative demand down to historic lows. US spot benzene closed at $1.355/gal the week of 26 June, rising from $1.00/gal the week of 29 May.

WTI crude futures also gained over the previous month, closing at $38.49/bbl the week of 26 June, up from $35.49/bbl the week of 29 May.

US benzene contracts typically settle on the last working day of the prior month and are largely determined by the average spot price over the last 10 days of the month.

Benzene is used to produce a number of intermediates that are used to create polymers, solvents and detergents.

Major producers of US benzene include ExxonMobil, Marathon Petroleum, Shell, Flint Hills Resources, Chevron, CITGO, LyondellBasell, Valero and Total.

Visit the ICIS coronavirus topic page for analysis of the impact on chemical markets and links to latest news.