The US benzene-crude ratio has been consistently lower than 2 since April 20 as ample benzene supply has kept benzene prices from reacting to crude gains, sources said.
This ratio was at 1.94 Thursday, based on S&P Global Platts pricing at $2.05/gal FOB US Gulf Coast for benzene and the NYMEX crude settlement at $44.32/b.
US spot benzene supply has been in excess for most of the year after Asia shipments to the US totaled more than 300,000 mt in January and February. While a lower amount of Asia shipments to the US has put bullish sentiment in the forward months since, the US has not been able to fully absorb the excess supply, sources said.
Market participants expect inventories to be in excess through May, but expect upward pressure on spot pricing at the end of May or into June from tighter supply.
"The US has been the cheapest priced region for too long," a source said.
The US is typically net short benzene production and depends on imports from other regions to help balance the shortage. There has been no arbitrage to the US from other regions for most of the year and this also supports tighter supply in June, sources said.
