NWE Naphtha Crack to Fall in Sep: Kpler

Kpler expects the monthly average naphtha crack in NWE to fall in September compared to August, Ciaran Tyler, Kpler’s lead analyst for natural gas liquids and naphtha told Bloomberg.

• Kpler forecast that the September NWE naphtha crack will average minus $7.50/b in September, compared to minus $5/b in August.
• While the NWE naphtha market has recently tightened, Kpler expect balances to loosen again in September
• This is because demand for naphtha blending into gasoline will fall as driving season passes the summer peak.
• In H2 September, refiners and blenders will require less naphtha to make gasoline due to the shift to winter spec.
• Kpler added that naphtha cracker maintenance in Germany will further cut demand.
• Simple refinery margins are likely to remain weak, keeping simply set up runs lower for longer. This will limit supply and slow the weakening in naphtha cracks for August, Kpler said.