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Turbulent Week For Naphtha

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This past week saw repeated attacks on Russian oil infrastructure, raising security concerns for a key section of global naphtha supply, in turn lending notable strength to the naphtha market.

Mar NWE naphtha cracks recovered to -$7.50/bbl on Jan 26, as NWE flat price soared past the $635/mt previous resistance level to trade above $650/mt.

The market had invested short into NWE spreads, thus, prices soared upwards to above $10/bbl handles in the front, as participants were seen short covering and stopping out.

The TC5 freight rate has continued to surge on further unrest in the Middle East over the weekend, lending support to naphtha E/W which remains axed long through resilient trade house and major buying. Mar E/W saw prices reach highs of $35.50/mt on Jan 29, before selling interest saw prices close back below $30/mt.

MOPJ structure has seen particular strength, with MOPJ cracks and Brent moving together and displaying a strong positive correlation of +0.88. Moreover, MOPJ cracks and naphtha E/W also portrayed a positive correlation of +0.81, again signalling a supported MOPJ complex, driving the E/W upwards.

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Our team of skilled analysts, by utilising the depth and breadth of Onyx's proprietary data, position ourselves at the cutting edge of market analysis. This unique vantage point grants us an unparalleled perspective in the market, enabling us to identify emerging trends and lucrative opportunities.