The spread in the physical market between CIF Northwest European naphtha cargoes and Eurobob Amsterdam-Rotterdam gasoline barges surged by $10/mt to hit $49/mt Monday, the widest ever in a Platts assessment.
Eurobob gasoline barges have been assessed since July 1, 2009. The spread was assessed at $39/mt Friday. The previous record assessed spread was $44/mt on January 7, 2010.
CIF NWE naphtha cargoes were assessed at $851.50/mt on Monday.
The widening spread between the two products comes as naphtha cracks in the over-the-counter market have surged in recent days with physical material following.
Naphtha cracks rose to plus $3.30/barrel for January on Monday. On December 13, January naphtha cracks stood around plus $1.30/b for January.
As naphtha cracks have risen the physical spread between the January swap and the CIF NWE cargo assessment has been relatively calm.
CIF NWE cargoes were assessed at a $5.75/mt discount to the January swap, this compares with a $3/mt discount on December 13 and a $2/mt premium on December 14.
The rise in NWE naphtha cracks in recent days has been largely linked to a surge in cracks in the Asian naphtha markets. The NWE market is structurally long and often arbitrages material to the Asian naphtha markets.
Naphtha CFR Japan on a flat price rose on Friday to $858.75/mt, the highest it has been since finishing at $864.75/mt on September 23, 2008.
Gasoline cracks in contrast have been relatively steady with Eurobob cracks for January around $5.25/b on Monday, compared with $5.65/b on December 13.
In the over-the-counter market the spread between the two products stood at $37.75/mt on Monday, on December 13 the spread was $16.75/mt.
The negative spread between the two products leads to poor gasoline blending economics, reducing the levels of naphtha entering the gasoline pool.
Physical Eurobob gasoline barges have fallen to a discount against front-month swaps, an unusual trend throughout the current quarter given that gasoline has demonstrated a tight market structure.
Platts assessed EBOB barges at $802/mt on Monday, $6/mt under January swaps.
"If you look at prompt gasoline, the market has come into a more balanced state. The December/January market was backwardated last week and is now bid at $3.50/mt contango," a trader said.
--Daniel Colover
Eurobob gasoline barges have been assessed since July 1, 2009. The spread was assessed at $39/mt Friday. The previous record assessed spread was $44/mt on January 7, 2010.
CIF NWE naphtha cargoes were assessed at $851.50/mt on Monday.
The widening spread between the two products comes as naphtha cracks in the over-the-counter market have surged in recent days with physical material following.
Naphtha cracks rose to plus $3.30/barrel for January on Monday. On December 13, January naphtha cracks stood around plus $1.30/b for January.
As naphtha cracks have risen the physical spread between the January swap and the CIF NWE cargo assessment has been relatively calm.
CIF NWE cargoes were assessed at a $5.75/mt discount to the January swap, this compares with a $3/mt discount on December 13 and a $2/mt premium on December 14.
The rise in NWE naphtha cracks in recent days has been largely linked to a surge in cracks in the Asian naphtha markets. The NWE market is structurally long and often arbitrages material to the Asian naphtha markets.
Naphtha CFR Japan on a flat price rose on Friday to $858.75/mt, the highest it has been since finishing at $864.75/mt on September 23, 2008.
Gasoline cracks in contrast have been relatively steady with Eurobob cracks for January around $5.25/b on Monday, compared with $5.65/b on December 13.
In the over-the-counter market the spread between the two products stood at $37.75/mt on Monday, on December 13 the spread was $16.75/mt.
The negative spread between the two products leads to poor gasoline blending economics, reducing the levels of naphtha entering the gasoline pool.
Physical Eurobob gasoline barges have fallen to a discount against front-month swaps, an unusual trend throughout the current quarter given that gasoline has demonstrated a tight market structure.
Platts assessed EBOB barges at $802/mt on Monday, $6/mt under January swaps.
"If you look at prompt gasoline, the market has come into a more balanced state. The December/January market was backwardated last week and is now bid at $3.50/mt contango," a trader said.
--Daniel Colover
