Naphtha Prices Plummeted Amid Increased Crude Oil Prices

Naphtha prices plummeted in the USA market in the ending of first week of November. The week ended on 8th November with an overall bullish outlook of Naphtha prices in the market. According to the analysts at ChemAnalyst, the prices stabilized at USD 550/MT FOB Texas USA. The bullish outlook in the market was observed in the last three weeks reflecting the complex market dynamics and conditions. The prices were impacted by raw material cost, freight charges, geopolitical tensions, demand-supply dynamics, and various other important factors which influenced the price trend.

The Naphtha market trend primarily follows the price trend of its feedstock that is crude oil. The prices of crude oil witnessed a significant surge in the week. The prices increased significantly by 3.5%. Despite the surge in crude oil prices, Naphtha prices fell in the market as the overall market sentiment for crude oil continued to be bearish. The crude oil prices surged due to various factors. The US elections impacted the overall market as US Dollar strengthened making it more expensive for buyers in the international market. As the OPEC+ countries delayed the production for the second time for December 2024, which put upward pressure on the prices in the week and impacted the prices in the short term. The escalating tensions in the middle east also impacted the market and contributed to the rise in the crude oil prices.

The increase in the prices of crude oil didn’t impact the prices of product in the market. The overall outlook for Naphtha remained bullish. The prices in the week declined due to slow demand for light distillate in the week. Planned maintenances at a few ethylene crackers impacted the demand for Naphtha in the region which ultimately led to declined demand and therefore declined prices in the market. US gasoline inventories fell 928000 barrels and distillate stocks dropped by 852,000 barrels. As the demand declined and inventories were used, the prices declined marginally by 0.4% in the market.

Looking further, the prices of Naphtha may witness an increase due to increased geopolitical tensions. The freight charges are also being impacted due to the ongoing geopolitical tensions which could impact the prices of Naphtha. Oil futures rose due to the win of Donald Trump in US presidential elections which could indicate toward bullish market conditions for Naphtha in the upcoming weeks. The demand and supply dynamics of Naphtha may remain volatile and therefore prices may fluctuate and remain volatile in the market. The start of winter season may increase the demand for Naphtha and therefore prices may see an increase in the coming weeks.