To The Moon

5.1 Crude/Brent

Synthesis

The global crude oil market experienced significant volatility, heavily influenced by the release of the latest Energy Information Administration (EIA) inventory report and shifting geopolitical landscapes [Argus]. The EIA reported a massive and unexpected 16 million barrel build in US crude oil inventories, pushing total commercial stocks to 435.8 million barrels [Argus]. This build represents the fifth-largest weekly gain on record dating back to 1982, primarily driven by a surge in net imports and a simultaneous drop in domestic refining demand [Argus]. 

Consequently, US benchmark West Texas Intermediate (WTI) crude fell, widening its discount to Brent [Argus]. Meanwhile, Goldman Sachs (GS) offered a comprehensive oil view, noting that crude prices have moved sideways with Brent holding in the low $70s [GS]. The market is hyper-focused on the upcoming US-Iran talks in Geneva, with President Trump emphasizing a diplomatic solution while keeping military options on the table [GS]. GS estimates that a significant market risk premium is currently embedded in oil prices due to these Middle East tensions [GS]. 

Adding to the supply chain complexity, the UK government launched sweeping sanctions against Russian oil pipeline operator Transneft and 48 vessels in the "shadow fleet," aiming to cripple Moscow's energy revenue [Onyx]. This has sent the cost of shipping oil soaring, with VLCC rates from the Middle East to China tripling since the start of the year to over $170,000 per day [Onyx]. Despite the bearish US inventory data, the market is trading with a broader risk-on macro bias [GS]. The divergence between the bloated physical inventories in the US and the geopolitically fraught international market is creating a highly complex trading environment for crude.

5.3 Naphtha

Synthesis

The Asian naphtha market is grappling with a mixture of geopolitical support and localized supply disruptions that are reshaping prompt trading dynamics [RIM]. Open-spec naphtha benchmark prices in Japan saw a notable uptick, rising by $2.00/mt to a range of $612.75-$619.25/mt, largely propelled by overarching geopolitical risks in the crude sector and a strengthening gasoline blending market [RIM]. Buying interest has started to cautiously emerge from key demand centers like South Korea and Taiwan, injecting some much-needed liquidity into the regional spot market [RIM]. 

However, the fundamental picture remains clouded by severe operational issues at major petrochemical facilities. Notably, Asahi Kasei Mitsubishi Chemical Ethylene Corp (AMEC) was forced to abruptly shut down its massive naphtha cracker in Mizushima, Japan, which boasts an annual ethylene production capacity of 567,000 mt, due to unresolved technical issues [RIM]. This unexpected outage has removed a significant chunk of regional naphtha demand and added uncertainty regarding the timeline for a restart [RIM]. 

Meanwhile, trade flows indicate potential shifts, with participants monitoring the arbitrage economics from the West and the impact of the newly implemented 10% global US tariffs on broader trade dynamics [Onyx]. Despite the cracker outages, overall supply remains adequate to meet current demand, though the market structure is heavily dependent on the trajectory of upstream crude prices. The Asian market is fundamentally caught in a tug-of-war between the bullish pull of crude oil and the bearish reality of struggling downstream petrochemical margins.

5.5 LPG/NGLs

Synthesis

The LPG and NGL markets are finding firm direction from a combination of robust US inventory draws and steady export demand, counterbalancing broader energy market fluctuations. The latest Energy Information Administration (EIA) data revealed a strongly bullish trend for US propane, with propane and propylene inventories falling by 1.653 million barrels to settle at 72.532 million barrels [Platts]. This draw continues a consistent downward trajectory that began in late December, though total stocks remain significantly elevated—40.7% above year-ago levels—providing an ample buffer against supply shocks [Platts]. 

In response to the inventory decline and robust export fundamentals, US Gulf Coast propane prices strengthened, with February barrels at the Enterprise terminal in Mont Belvieu gaining 2 cents to reach 60.25 cents/gallon [Platts]. Canadian propane prices mirrored this upward momentum, rising in tandem with the US Gulf Coast gains, while the Conway differential remained notably steady [Platts]. In Asia, the market was characterized by stability amidst thin trading volumes as participants slowly returned from the Lunar New Year holidays [RIM]. Propylene prices in the CFR Northeast Asia market held unchanged at $830-$840/mt, while FOB Korea prices were stable at $780-$790/mt [RIM]. Meanwhile, CFR India prices for evenly split propane/butane cargoes for March delivery advanced by $6/mt to $593-$603/mt, driven by upward revisions to the March Saudi Contract Price (CP) forecast and sustained buying interest from major regional importers [RIM]. The global LPG complex remains tightly tethered to the aggressive export program out of the US Gulf Coast.

5.7 Gasoline/Mogas

Synthesis

The global gasoline market is exhibiting highly divergent trends, heavily influenced by contradictory regional inventory reports and rapidly shifting trade flows across the Atlantic and Pacific basins. In the United States, the Energy Information Administration (EIA) released deeply mixed data; while total US gasoline stockpiles fell to their lowest level in six weeks—down 0.4% to 254.8 million barrels due to a decline in refinery runs—this national draw masked severe localized gluts [Argus]. Most notably, US central Atlantic coast gasoline stocks surged by 3.7% to an 11-month high of nearly 34 million barrels, driven by steady domestic inflows from the Gulf Coast [Argus]. 

Simultaneously, the US Gulf Coast itself experienced significant inventory oversupply in recent weeks, prompting a massive ramp-up in exports to the Bahamas and other Caribbean locations, which averaged nearly double the volumes seen last year at 255,000 b/d [Argus]. This aggressive export surge has subsequently increased flows of Gulf Coast gasoline to the US West Coast, helping to draw down inventories there to a two-month low of 29.82 million barrels [Platts]. 

In the Asian market, conditions remain fundamentally well-supplied, though traders are anticipating a tightening balance. Chinese gasoline exports are expected to moderate to around 400,000-500,000 metric tons in March, which could provide some relief to the regional overhang [RIM]. Currently, differentials for MR-size cargoes of 92 RON gasoline on an FOB South Korea basis traded at a steep discount of $3.00-$3.20/bbl to Singapore quotations, reflecting the persistent need to clear excess production out of Northeast Asia [RIM].

5.8 Petrochemicals

Synthesis

The global petrochemical sector is navigating a precarious period of stabilization as markets fully reopen post-holidays, though underlying margin pressures and unexpected supply shifts continue to dictate price action across the value chain. In the aromatics complex, US Gulf Coast benzene spot prices experienced significant downward pressure, dropping 8 cents/gallon to 299 cents/gallon for March delivery as the contract price trading window officially closed [Platts]. This decline was largely attributed to expectations of a more balanced market driven by a lack of incoming imports and the anticipated restart of downstream derivative plants, which eased prompt panic buying [Platts]. 

Conversely, the Asian ethylene market showed distinct signs of underlying support, with CFR Northeast Asia prices rising $25/mt to $700-$720/mt [RIM]. This strength was entirely bolstered by perceptions of tightening supply-demand balances as several major ethylene facilities in Japan, South Korea, and Southeast Asia prepare for scheduled spring turnarounds [RIM]. Furthermore, the unexpected and indefinite shutdown of Japan's AMEC naphtha cracker—removing 567,000 mt/year of capacity—has amplified these regional supply concerns, overriding the generally weak consumer demand profile [RIM]. 

In the polymers segment, polyolefin prices on a CFR China basis remained remarkably stable as the market returned from the Lunar New Year, though buyers maintained a highly cautious, wait-and-see approach [RIM]. Chinese domestic low-density polyethylene (LDPE) film prices actively softened to Yuan 8,600-8,700/mt amid ample product supply and sluggish downstream processor demand, confirming that the end-user market remains depressed [RIM]. In the US, spot polymer-grade propylene prices drifted lower on the back of reduced bids and offers, despite ongoing and contentious February contract price negotiations [Platts].