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(ICIS) -- A combination of high crude oil
prices driven up by ongoing violence in Libya and a firmer crack spread
supported by tight supplies pushed European naphtha prices to $1,006-1,014/tonne
on Friday, ICIS data showed. The rise took the average weekly price to
$989.50/tonne CIF (cost, insurance and freight) NWE (northwest Europe), the
highest level since August 2008.
A crack spread that firmed throughout the week, in addition to rises in
the price of crude oil, sent the cargo range upwards.
At 16:30GMT on 28 February, the crack spread was at minus $5.25/bbl while
April Brent crude oil reached $112.88/bbl. This resulted in a naphtha cargo
range of $951-959/tonne.
By Friday morning, the crack spread had firmed to minus $2.65/bbl, while
April Brent had climbed to $115.50/bbl, resulting in the aforementioned range of
$1,006-1,014/tonne.
This was in contrast to the trend of the previous two weeks, when the
crack spread had weakened in response to crude oil price hikes. The softening of
the spread helped curb what would have been higher naphtha price rises, with the
aim of lessening damage to demand.
However, this week a tightening of the market had negated the need for
this, resulting in a stronger crack spread.
mrcplast.com
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