In our latest naphtha market commentary:
> Softening West of Suez gasoline complex, narrower gas-nap has increased naphtha export availability out of the Med
> Med refinery works ebb in October, further loosening supply, aligning with Med-Far East arbs becoming increasingly profitable through end-Q4
> In contrast, rallying AG FOB prices, seasonal MOPAG-MOPJ suggest AG-Asian arbs to remain shut
> Northwest MR, AG LR vessel supply remains lengthy, indicating freight rates could fall further, remaining the key driver in reopening arbs
> Tighter near-term Asian refinery output, naphtha demand from regional petchems buoy E/W spread but weak cracker margins, improving refinery supply from mid-Q4 could cap cash diff upside
> USGC-Rotterdam light naphtha arb opened briefly for the first time since March as US demand falters; Houston FOBs could soften further as PADD 3 barrels seek alternative homes
