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Naphtha Margins to Fall on Weaker Gasoline Blending Demand: Kpler

OIL PRODUCTS

Weak demand from gasoline blending and chemicals production are expected to drive weaker naphtha margins toward the end of December according to Kpler last week.

  • “NWE naphtha cracks will begin to fall more meaningfully versus the five-year average towards the end of December as the global supply tightness eases.”
  • Med cracks are also expected to see downward pressure compared to the five-year average.
  • Slowly easing supply tightness in Russia and the Middle East could weigh on Asian cracks next month.
  • Naphtha cracks in the US “will be forced to move even lower as blending demand continues to decline, as rising stocks will need to force prices low enough to reopen the arbitrage to Asia via the Cape of Good Hope.”

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