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Market Overview
Naphtha
Asian naphtha markets were superbly bearish in May. The STS operations out of the AG Gulf has significantly raised the volume reaching Far East outlets and reduced the need to import fresh cargoes from the West.
Even with improved feedstock supply, steam crackers are running at low utilisation rates due to weak petchem margins as demand destruction takes hold due to higher prices.
Wide Gas-nap spreads allows more naphtha into gasoline blending.
MOGAS
Mogas cracks has upside potential as we head into summer with limited VGO supply needing to fulfil both diesel and mogas demands. Tail risk on US export ban that can push this up even higher.
Houston arbs were briefly open to Australia when Gas E/W hit a high of -3.90$/bbl but has come off since to close the arb again.
Singapore to Rosarito arbs remain wide open.
