Naphtha arbitrage and blending strengthen, but Europe’s market hits a plateau on a weaker petrochemical market

Commentary summary:

• Naphtha timespreads may have reached a ceiling after a strong Q1 performance.

• Asian cash diffs keep increasing, widening the gap with NWE alternatives.

• Cracks continue to trade firm, with the MOPJ crack staying in positive territory.

• Transit through the Suez route now appears less likely, pushing arbitrage flows toward the Cape of Good Hope and impacting the E/W outlook.

Naphtha timespreads seem to have found a ceiling after the strength seen during Q1, with a weaker European market amid a sluggish petrochemical sector.

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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