As per the recent analysis, the prices of Naphtha were assessed to be stable and unchanged in the week ending on 14^th March 2025. The prices remained stable driven by the temporary stability in supply and demand dynamics. However, the market sentiments continued to be bearish backed by waning demand from major downstream sectors like petrochemical and fuel production sector. The supply dynamics also put downward pressure due to continuous decline in the feedstock crude oil prices. Overall, the sentiments remained bearish while temporary equilibrium in market conditions led to stable prices.

On the supply side, the crude oil prices continued the downward trajectory in the week followed by the announcement by OPEC+ countries to proceed with the planned production hike in April 2025. The pricing was also influenced by anticipation of major changes to U.S sanctions on large oil producers like Iran, Russia, and Venezuela as well as US tariffs in China that could reduce demand and impact the pricing dynamics of Naphtha in the market. Refineries operated at 86.9% of their operable capacity last week as quoted by EIA, reflecting steady supply with moderate processing rates in the market, ensuring steady supply of Naphtha.

The demand for Naphtha from downstream petrochemical and fuel sectors showed mixed influences. Although increase in gasoline to 9.6 million barrels per day reflected steady consumption of Naphtha in the sector, a slight decline in refinery outputs and lower crude oil imports suggested constrained feedstock availability, indicating towards potential limiting Naphtha output. Propane/Propylene inventory levels declined in the week which reflected sustained demand from petrochemical sector. Overall, the demand trends were observed to be mixed while supply was steady. However, the supply was sufficient to meet the current demand which led to temporary equilibrium between supply and demand dynamics and stable pricing in the week.

According to the analysis, the prices of Naphtha are expected to decline due to a combination of factors influencing the market dynamics. Rising alternative feedstock availability, tariffs related uncertainties and shifting supply chain dynamics may play major role in the market dynamics. The petrochemical sector is expected to face headwinds influencing the demand for Naphtha in the market. The production costs are expected to decline further owing to bearish sentiments and declining crude oil prices in the market. However, the market may rebound due to increased export demand and rise in crude oil prices happens in future. Furthermore, geopolitical tensions in the international market may provide the needed push to the market of Naphtha which may lead to the upward pressure on prices.