Naphtha Prices Ease Following Broader Energy Market Weakness

Correlation with Crude and Gasoline

Naphtha is a primary feedstock for both gasoline blending and petrochemical cracking. With US retail gasoline prices hitting multi-year lows and crude oil markets grappling with a supply glut, naphtha prices have naturally followed the downward trend. The decline below the $500 mark is a significant psychological break, reflecting the broader bearish sentiment across the energy complex.

Petrochemical Cracking and Future Outlook

Despite the price drop, demand from petrochemical crackers remains functional. However, as alternative feedstocks like LPG become more competitive due to their own price weakness, naphtha is facing a challenging competitive landscape. Market participants are looking toward the 2026 demand recovery for a potential price rebound, but the short-term outlook remains tethered to the oversupplied oil market.