Naphtha

Naphtha serves as a versatile feedstock for the petrochemical industry, crucial in producing plastics, synthetic fibers, and various chemicals that contribute significantly to manufacturing and industrial processes.

Latest News

Case Study: Mar Naphtha E/W

Despite the geopolitical risk premia buoying up the naphtha E/W, we recommended shorting the Mar E/W in our Feb 13 naphtha report. Find out more about the logic behind this trade in our new case study.

Fuelling the Greatest Game

A year review of how fluctuating trends in oil derivatives compare to the performance of some Premier League football clubs in 2023.

Tuesdays are for Trade Ideas

The freshest trade ideas of 2024 – This week’s edition includes a review of our PnL from December 2023 alongside previous months’ PnL from 2023.

Buy the leak, sell the news

Last week we saw the naphtha EW roof, fuelled by the skyrocketing TC5 freight rate (which passes through the Bab al-Mandab strait, the bottleneck of the Red Sea). Turmoil in the Red Sea has allowed for the TC5 freight rate

EIA ANNOUNCES 4.26mbbls CRUDE DRAW

The Brent futures flat price for the prompt contract has seen a stronger afternoon, rising almost $1/bbl from $73.46/bbl at 12:00 GMT to highs of $74.33/bbl at 16:45 GMT. The EIA announced a second consecutive crude inventory draw, with stocks

Edge Updates

COT Report: Bears Show Their Claws

We’ve seen the Sep Brent Futures flat price rise back above $85/bbl and an unexpectedly large 4.9mb draw in US crude inventories. Where will markets head this week?

Overnight & Singapore Window: Brent Trading Around $83.50bbl

The September Brent futures flat price has a mixed morning, ticking down from $83.65/bbl to a low of $83.45/bbl by 07:30 BST, before rallying to $84.10/bbl by 08:55 and then subsequently falling back down to $83.65/bbl as of 11:10 BST (time of writing).

European Window: Brent Ticks Below $84/bbl

The September Brent futures had a mixed afternoon, initially falling from $84.05/bbl to $83.35/bbl by 13:10 BST, its lowest level since 18 June, before it then rallied back up to the afternoon’s high of $84.30/bbl at 16:20 BST.

Naphtha Report: Just Go With the Flow…

We continue to see strength across the naphtha complex, although we appear to now be approaching the dangerous realm of potential buy-side saturation with rising selling in naphtha cracks in Europe, alongside selling in the E/W.

Overnight & Singapore Window: Brent softens below $85/bbl

The September Brent futures contract has witnessed a weaker morning amid the flat price, falling from above $84.50/bbl at 06:45 BST to $84.10/bbl as of 11:30 BST (time of writing). Sentiment likely remains pressured following the poor Chinese economic data announcements from this week, with market players now awaiting cues of stronger stimulus measures at the Third Plenum this week. Furthermore, China is reportedly planning to cut carbon emissions in its coal power industry by methods such as carbon capture, utilisation and storage, in addition to attempting to fire power plants using coal mixed with either green ammonia or biomass. Russia’s exports of crude oil fell to an average of 3.11mb/d in the four weeks ending 14 July, their lowest level since January 2024. The drop was predominantly in shipments from Russia’s Baltic ports of Primorsk and Ust-Luga, where exports dropped by 11% in two weeks. This afternoon, the market is likely to turn its attention to US macro data, notably US retail sales (released today at 13:30 BST), which will impact expectations around the timing of a policy rate cut by the Fed. Finally, at the time of writing, the front-month and six-month futures spread stood at $0.90/bbl and $3.75/bbl, respectively.

European Window: Brent Hovers Around $85/bbl

The September Brent futures flat price has had a fairly flat afternoon, with the exception being its dip to just below $84.50/bbl from $85.10/bbl between 14:30 BST and 14:45 BST.

Overnight & Singapore Window: Brent softens below $85/bbl

The September Brent futures contract saw weakness early this morning, falling to $84.75/bbl at 08:40 BST. Since then, the Sep flat price found support and rallied to $85.10/bbl as of 11:20 BST but fell again to $84.95/bbl as of 11:30 BST (time of writing).

European Window: Brent Softens Below $86/bbl

The September Brent futures contract fell to $84.75/bbl at 14:40 BST, following which it climbed to $85.50/bbl at 16:10 BST and ultimately softened to $85.20/bbl at 17:20 BST (time of writing).

Overnight & Singapore Window: Brent rallies amid easing US CPI

The September Brent Futures contract has seen a weaker morning, trading down from $85.77/bbl at 07:00 BST to a low of $85.20/bbl at 10:20 BST, before retracing upwards to print at $85.33/bbl at the time of writing (11:30 BST). In headlines today, the IEA has released its monthly oil report, maintaining its bearish global oil demand forecast. For this year, demand growth is expected to increase slightly to 970kbpd, reaching an average of 103.05mbpd, driven by increased consumption from developing nations. The organization also revised its 2025 oil-demand growth projection down to 980kbpd from the previous 1mbpd, with total demand now anticipated to average 104mbpd. This starkly contrasts with OPEC’s more bullish views, released yesterday. While the IEA still sees a global balance deficit on average in 2024, its view tips into a surplus for 2025. In other news, data from Kpler reveals a substantial decline in crude oil exports from major OPEC+ producers in June, primarily due to weak demand in Asian markets and increased domestic consumption in the Middle East. Notably, Saudi Arabia’s exports plummeted by 930kbpd to 5.42mbpd, marking the lowest level since at least 2013. At the time of writing, the front and 6-month Brent Futures spreads are at $0.89/bbl and $3.90/bbl, respectively.

European Window: Brent softens to below $85/bbl

The September Brent futures contract fell to $84.75/bbl at 14:40 BST, following which it climbed to $85.50/bbl at 16:10 BST and ultimately softened to $85.20/bbl at 17:20 BST (time of writing).

Overnight & Singapore Window: Brent Softens to $85.33/bbl

The September Brent Futures contract has seen a weaker morning, trading down from $85.77/bbl at 07:00 BST to a low of $85.20/bbl at 10:20 BST, before retracing upwards to print at $85.33/bbl at the time of writing (11:30 BST). In headlines today, the IEA has released its monthly oil report, maintaining its bearish global oil demand forecast. For this year, demand growth is expected to increase slightly to 970kbpd, reaching an average of 103.05mbpd, driven by increased consumption from developing nations. The organization also revised its 2025 oil-demand growth projection down to 980kbpd from the previous 1mbpd, with total demand now anticipated to average 104mbpd. This starkly contrasts with OPEC’s more bullish views, released yesterday. While the IEA still sees a global balance deficit on average in 2024, its view tips into a surplus for 2025. In other news, data from Kpler reveals a substantial decline in crude oil exports from major OPEC+ producers in June, primarily due to weak demand in Asian markets and increased domestic consumption in the Middle East. Notably, Saudi Arabia’s exports plummeted by 930kbpd to 5.42mbpd, marking the lowest level since at least 2013. At the time of writing, the front and 6-month Brent Futures spreads are at $0.89/bbl and $3.90/bbl, respectively.

Overnight & Singapore Window: Brent Slides Down to $85.40/bbl

The September Brent Futures contract has seen a mixed morning, at first rallying up to $85.84/bbl at 07:00 BST before experiencing a sell-off down to $85.14/bbl at 10:45 BST and subsequently rebounding to $85.36/bbl at the time of writing (11:10 BST). In headlines today, Saudi crude exports to China are expected to rebound in August to around 46mb, driven by allocations to Unipec and Rongsheng Petrochina, after Saudi Arabia cut OSPs for August-loading barrels. This follows a drop in exports to 36mb in July, the lowest since March 2020, according to Kpler. In other news, Eni announced a significant natural gas discovery in the Gulf of Mexico, estimated at 300 to 400mb of oil equivalent. The discovery is in the Sureste Basin, where Eni has over 1.3 billion barrels of oil equivalent in resources and comes amongst plans to develop the area into a hub, leveraging several nearby discoveries. Also in the region, Mexico’s state energy major, Pemex, has been expanding gas-powered generation and increasing domestic gas resource development to reduce dependence on U.S. imports. Mexico recently updated its proven oil and gas reserves from last year to 8.383 billion barrels of oil equivalent from 5.978 billion barrels, with proven natural gas reserves rising to 12.297 trillion cubic feet from 11.029 trillion cubic feet. At the time of writing, the front and 6-month Brent Futures spreads are at $0.76/bbl and $3.47/bbl, respectively.

European Window: Sinusoidal Brent around $86/bbl

The September Brent futures flat price witnessed a choppy Monday afternoon, first rising to $86.25/bbl before falling to $85.75/bbl, where it remains as of 17:00 BST (time of writing). In the headlines, ExxonMobil said that lower natural gas prices and refining margins are expected to hit the oil major’s Q2 earnings. Devon Energy announced on Monday that it had entered a deal to acquire Grayson Mill Energy’s Williston basin business in a cash-and-stock deal worth $5 billion, as it aims to cash in on high stock valuations to grow acreage. US SPR crude inventories rose by 0.5mb w-o-w to 373.1mb last week. According to Argus, the freight cost between Russia’s Black Sea port of Novorossiysk to China has fallen to the lowest level since October. At the time of writing, the Sep/Oct and Sep/Mar Brent futures spreads are at $0.81/bbl and $3.61/bbl, respectively.

Overnight & Singapore Window: Brent Slips Below $86.00/bbl

The September Brent futures contract has been on a downward trajectory this morning, inching lower from above $86/bbl at 08:00 BST to $85.85/bbl at 11:35 BST (time of writing). The persistent decline in prices following a peak of nearly $88/bbl last Friday highlights possible profit-taking by long-positioned players. In addition, the ports of Corpus Christi, Houston, Galveston, Freeport and Texas City reportedly shut operations as Hurricane Beryl intensified to Category 1 level alongside expectations of the hurricane strengthening further to Category 2. Kazakhstan’s energy ministry stated that the country will compensate for the overproduction of oil in 1H’24 by September 2025, with output exceeding its OPEC+ quota. Following recent disasters at energy storage facilities, Chinese authorities are planning to order large-scale fire safety investigations of these plants. In the eurozone, investor morale broke an eight-month streak of improvements, with Sentix’s index for the region falling to -7.3 points for July (prev: 0.3). Finally, at the time of writing, the Sep/Oct and Sep/March futures spreads stood at $0.80/bbl and $3.68/bbl, respectively.

Overnight & Singapore Window: Brent Climbs to $87.60/bbl in Early Trade

The September Brent futures flat price witnessed an impressive rally early this morning. The contract moved sharply up from $87.15/bbl minutes before 08:00 BST to $87.60/MMBtu at 08:40 BST. However, the benchmark crude futures contract subsequently weakened and stands at $87.30/bbl as of 11:25 BST (time of writing)

TMNs: Whatever Floats Your Vote

What a week it is for European elections as the UK goes to the polls today, whilst France has the second round of its legislative election on Sunday. Ironically, the UK’s election will likely only have a Conservative effect on markets due to the scale and appearing inevitability of Labour’s landslide, predicted to be the greatest seen since 1832(!!!).

European Window: Brent crude oil rallies to 4-month highs

The September Brent futures flat price rose over the afternoon to its highest level since April. It rallied from around $86.75/bbl at 12:45 BST to $87.55/bbl at 17:25 (time of writing). Saudi Aramco has reduced the official selling price (OSP) for Arab Light crude oil for Asia to $1.80/bbl above the Oman/Dubai average benchmark, down by $0.60/bbl for August.

COT Report: Have Bears Received the Upgrade Package?

We’ve seen the Aug Brent Futures flat price rise above $87/bbl and a large, unexpected draw in US crude inventories. Where will markets head this week? See all the updates across the barrel in this week’s Onyx Commitment of Traders report, as well as 6 one to watch for the week ahead. Click on the relevant button below to access your COT report.

Naphtha Report: Boogy on the Buy-side

We continue to see strength across the naphtha complex, although we appear to now be approaching the dangerous realm of potential buy-side saturation with rising selling in naphtha cracks in Europe, alongside selling in the E/W.

Overnight & Singapore Window: Sep Brent Climbs to $87.20/bbl

The September Brent futures contract saw a strong morning, trading from around $86.80/bbl at 8:00 BST down to a low of $86.60/bbl at 08:40 BST before rising steadily over the remainder of the morning to reach $87.24/bbl at the time of writing (11:00 BST)…

European Window: Brent finds resistance at $85.30/bbl

The September Brent futures contract initially rallied into the afternoon, climbing from $84.70/bbl at 12:20 BST to $85.30/bbl at 16:30 BST. Following this, however, the benchmark crude futures began to sell off and fell to $84.70/bbl at 17:20 BST (time of writing).