Naphtha paper market ease but fundamentals still point to short-term strength

Commentary summary:

• The recent pullback in cracks and timespreads follows a strong rally since early April driven by Western refinery outages and LPG tariffs.

• Asian cash diffs surpassed $10/mt for a fifth consecutive week, and the E/W rebounded above $20/mt.

• In Europe, NWE premiums approached $10/mt, supported by reduced MED supply due to a regional blackout.

• Q3 outlook is more fragile, challenged by closed arb, increasing refinery runs, and falling petrochemical prices.

Moderate correction in Nap NWE and MOPJ timespreads and cracks seen during the first sessions of the week.

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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