- Weak demand for blending grades- US Arbitrage Expected to Reopen



The gasoline summer transition was causing
a steep decline in naphtha demand. "Blending
grades are having difficulty finding their way into gasoline pools. A source stated that the amount of finished-gasoline cargoes
is decreasing, octanes have high prices, and naphtha has a steep backwardation
which prevents any kind of backwardation. "People
are also planning...for the [spring/summer] grades transition, so historically,
it is normal for the demand to drop at this time of the year." The front-month CIF NWE naphtha Swap discount to its
gasoline equivalent was increased by $14.50/mt at $88.75/mt February 23. Sources indicated that there was growing expectation that
the US Gulf Coast arbitrage will increase to Europe after months of poor
conditions. Sources said that more imports
would occur in the second...