Naphtha market softens as E/W correction tests arbitrage to Asia

Commentary summary:

• The naphtha market is undergoing a moderate correction, with the paper market lagging in Asian and European cracks and timespreads.

• Despite this, E/W levels remain at historical seasonal highs for late-year contracts and through 2026, keeping the arb gate open for the West.

• Gas-nap spreads have strengthened across markets, led by Asia, where RFCC shutdowns at Pengerang and delayed restarts boosted Singapore 92 complex cracks.

• Pro-nap spread continues to weaken amid increasing US exports to FE outlets like Japan, Korea and Indonesia.

Philip Jones-Lux is Senior Analyst for Sparta. Having worked with organisations such as JBC Energy and RP Global, Philip is a seasoned energy market analyst with expertise across the oil barrel and power markets

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