The US benzene-to-crude ratio touched its highest point in 35 months Thursday at 2.39, based on the Platts US benzene assessment and the NYMEX front-month crude futures settle.
The ratio -- which has been rising since June 22 -- was last near this level on July 29, 2009, when it was at 2.47.
Benzene was assessed Thursday at $4.45/gal ($1,330.55/mt) FOB US Gulf Coast, down 10 cents from Wednesday as supply shorts in the market were heard mostly covered. Bids fell 10 cents ($30/mt) Thursday to $4.25/gal ($1,270.75/mt) FOB USG against no offers.
Many sources considered benzene to be in a "bubble," with several expecting a decrease in spot prices before the end of the month.
Market talk diverged, however, with respect to whether benzene was likely to remain lower on poor downstream demand in derivatives such as styrene and phenol following the expected initial decline in July, or whether benzene would indeed fall in the short term but strengthen again by August on continued snug supply due to reduced operating rates for MSTDP units and shut TDP production units.
On Thursday, NYMEX August crude settled down $2.52 to $77.69/barrel on the back of US equities that faltered after the US Supreme Court upheld President Obama's health care reforms, and investors still monitoring the outcome of an EU summit on the region's debt crisis.
Earlier this week, the benzene-to-crude ratio for Brent crude reached a 20-month high Tuesday at 2.08. The ratio was last assessed at this level on February 10, 2010, when it was at 2.09.
On Tuesday, US benzene was assessed at $4.50/gal ($1,345.50/mt) FOB USG and ICE August Brent settled up $2.01 at $93.02/b.
ICE August Brent settled $2.14 lower at $91.36/b Thursday.
