London (Platts)--11Dec2012/846 am EST/1346 GMT

Vitol is loading up to 65,000 mt of open specification naphtha out of Northwest Europe via ship-to-ship operations for the US this week, a company source said late Monday.

Vitol loaded 30,000 mt of naphtha Monday via STS operations in the Amsterdam-Rotterdam-Antwerp area onto the CPO Italy clean tanker for New York Harbor, the source said.

Vitol also intends to load 35,000 mt this week via STS operations on board the Horizon Theano out of ARA for the US Gulf Coast, the source said.

The company has been buying heavily since early February in the Platts CIF Northwest Europe naphtha Market on Close assessment process this year. Typically around 350,000 mt has traded monthly in the MOC process since the start of 2012.

Article continues below...

Request a free trial of: Oilgram News
	Oilgram News brings fast-breaking global petroleum and gas news to your desktop every day. Our extensive global network of correspondents report on supply and demand trends, corporate news, government actions, exploration, technology, and much more.

The Vitol company source confirmed that the 65,000 mt it planned to send this week to the US was made up of open specification naphtha purchased in the Platts CIF NWE naphtha MOC process.

The source said the company was moving the product to the US following the recent uptick in the NYMEX RBOB futures January contract.

Naphtha flows from Europe to the US price off RBOB futures, he said.

"You sell off RBOB and the sale is volume related rather than per metric ton."

At Monday's European close the January NYMEX RBOB contract was last assessed at 2.6173 cents/gallon, up from 2.6018 cents/gal Friday.

"It could be the US have more octanes over there, hence they need more naphtha to blend it with [for gasoline," the Vitol company source said.

However, there are currently limited naphtha flows to the US, a second naphtha trade source said.

"I don't think there's very much naphtha flowing from Europe to the US for blending at the moment."

The arbitrage economics from Europe to the US have been unworkable for most players since early February because of a poor performing RBOB gasoline futures contract and a relatively wide CIF NWE outright naphtha premium to the US CIF Houston light naphtha barge, last seen at $87.61/mt at Monday's Platts US close.

Previously, an even higher outright European price attracted "reverse arbitrage" naphtha deliveries out of the Americas from April up until mid- July.

--Anna Ward, anna_ward@platts.com
--Edited Alisdair Bowles, alisdair_bowles@platts.com

Tweet