The Northwest European Naphtha Discount to Eurobob Gasoline Hit Its Widest in Three Months

The Northwest European naphtha discount to Eurobob gasoline has hit its widest in three months, due to weak naphtha demand for petrochemical use, traders said. 

At Friday's European close, CIF NWE naphtha cargoes were assessed at $890/mt, down $35/mt from Thursday. That put naphtha cargoes at a $74/mt discount to FOB Rotterdam EBOB gasoline barges which were assessed at $964/mt. 

This is the widest discount since October 12, Platts data shows, when naphtha cargoes were assessed at an $82/mt discount to EBOB gasoline barges. 

In the European morning Monday, the paper gasoline-naphtha spread was heard bid at $67.50/mt and offered at $70.50/mt, a gasoline trader said. 

"The wider gasoline-naphtha spread justifies buying more N+A naphtha and the refiners have hydrotreatment. They could also blend naphtha into gasoline if the sulfur is controllable," the trader said. 

N+A naphtha can be used as either a reformer feed or as a blending component. 

Demand for N+A naphtha had risen as a result since the start of the week when the differential had first widened significantly, traders said. 

"N+A naphtha is trading in Amsterdam-Rotterdam-Antwerp at an $18/mt premium to CIF Northwest Europe naphtha cargoes, possibly a little higher. This is up about $6/mt in a week and $8/mt or so since the start of the year," a second gasoline trader said. 

The key factor for the fall in naphtha prices compared with gasoline is weak demand, naphtha traders said. 

Petrochemical companies are buying propane which has fallen recently to a substantial discount to naphtha, Platts data shows. 

At Friday's European close, North Sea propane was last assessed at a $94/mt discount to naphtha. This was propane's wisest discount to naphtha in six months, Platts data shows.