FGE’s Condensate and Naphtha Service dissects and examines the volatile short-term market for condensate, to deliver clear, concise and insightful views on the forward market.
The East of Suez condensate trading market has been thrust increasingly into the spotlight this year with the looming US sanctions on Iran in November 2018. This has pushed differentials for DFC condensate to highs not seen since early 2016. It has also opened the arb for greater volumes of condensates from the west to flow east. This has come at a time when US condensate production has rebounded.
In our monthly report, we look closely at both condensate supply and demand East of Suez and forecast an Eastern balance. We factor in regular flows from the West, and how much more may be needed based on Eastern requirements.
This year, the relationship between condensate and naphtha has also been closer than usual. The tight condensate market has prompted splitters in Asia to switch to running full-range naphtha. How long will this continue? We discuss the dynamics between both markets and the eventual impact on naphtha prices.