Tight supply dynamics continue to underpin the naphtha outlook
Commentary summary:
– Rising Asian cash diffs for December arrivals support West-to-East arbitrage.
– The risk of European contango has disappeared following Russian sanctions.
– The gasoline complex reinforces naphtha demand, with gas-nap at new highs and strong LVN/C5 premiums.
– Future refinery restarts could add supply and introduce medium-term downside pressure.
The naphtha market remains supported at present, strengthening its backwardation in the prompt and down the curve in both the European and American markets.
Jorge Molinero is Commodity Owner for Gasoline 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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