Light Ends
Market Overview
Naphtha cracks, East/West spreads and MOPJ timespreads continue to surge as steam crackers scramble for feedstock and pull barrels from the West.
The petchem sector will be the last to recover post-Hormuz reopening due to the sequencing of startup activities. More pain ahead.
Feedstock anxiety is driving a structural shift in naphtha trade flows, with ARA and USGC-to-Asia arbitrage routes fully open.
US EPA emergency waiver has raised the summer volatility ceiling from 51 kPa to 69 kPa, creating unexpected new demand for naphtha.
Mogas cracks were late to react but have risen significantly. Most notable: Sing 95/92 spread has widened to +$7/bbl for April at its peak but have come off considerably.
Reformers running at minimum intake — cutting high-octane reformate, BTX and pygas output — as they produce just enough hydrogen for hydrotreaters.
China refined export ban cuts CN Oxy grade avails to the gasoline blending pool but MTBE is readily available, explaining the drop in octane premiums.
Houston arb open to Botany Bay; ARA barrels looking to supply East of Suez for early May arrival.
Europe mogas looks underpriced for summer — watch for tightness building in that market.
