Have we left the bottom behind?

Commentary summary:

– Europe’s correction in physical premiums has widened export opportunities to Asia, increasing demand for cargoes and boosting the paper market.

– Europe remains in contango for the Dec/Jan spread, raising the question of whether the rebound will continue into year-end.

– A decline in West to East freight, combined with a strong E/W trend, keep improving the arbitrage economics.

– US physical premiums are stabilising while Asia shows stronger margins for heavy naphtha cargoes.

The naphtha market has experienced a rebound over the past week, particularly notable in the prompt timespreads of the European and Asian markets.

Jorge Molinero is a Commodity Owner at Sparta. Starting his career as a financial analyst with BBVA, Jorge quickly transitioned to market intelligence within the energy sector, spending 4 years as a naphtha analyst with Repsol before joining Sparta in early 2023.

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