Trade Idea: Long The Q1 Euro NAPHTHA Crack

For this week’s trade idea, Onyx Research Analyst Dorian Colas recommends going long on the Q1 Euro NAPHTHA crack. Citing a recent rise in price that remains overall historically low, we forecast better support this month on the back of fundamentals firming up in both the East and West.

There are strong selling flows in the Q1 East-West as players hedge their physical in anticipation of the term negotiations for cargoes leaving the black sea, and we expect this to continue as negotiations are agreed. However, we expect volatility in Q1 to increase – so set a wide stop loss.