Naphtha Has Bad News for Global Economy



Naphtha Has Bad News for Global Economy
An obscure product made by oil refineries has a grim story to tell investors right now about the fortunes of the global economy.

Gasoline inventories in the U.S. Gulf of Mexico are at the highest for the time of year since at least 1990.

With no signs of a U.S.-China trade deal in sight, and predictions that American crude production will only keep surging, the immediate future of the naphtha market looks precarious.

“I don’t see a U.S.-China trade deal happening anytime soon”, said Steve Sawyer, a senior analyst at Facts Global Energy in London. “Naphtha cracks are set to remain weak till at least the end of the year.”

To contact the reporters on this story:
Prejula Prem in London at pprem1@bloomberg.net;
Jack Wittels in London at jwittels1@bloomberg.net

To contact the editors responsible for this story:
Alaric Nightingale at anightingal1@bloomberg.net
Brian Wingfield


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Roy  |  June 18, 2019
Naptha comes off the crude distillation tower, it isn't a cracked produce. There's too much of it in each barrel of crude to get rid of as a component of other chemicals, so it has to be sent as feedstock to the cracker and made into gasoline. We'd have built more diesel refineries in ND if we could have gotten rid of the naptha byproduct.