LONDON - European gasoline component methyl tertiary butyl ether (MTBE) prices slumped this week with sentiment still bearish as futures volatility and high stocks put off buying interest, traders said yesterday. MTBE bids moved to $255 a tonne, with offers around $260, after trades this week from $269 down to $263.
"It's rather bearish, with gasoline still strong compared to crude," said an MTBE trader, adding that price direction still depended on futures. "Crude is so volatile, buyers are on a wait-and-see policy," he said.
MTBE is added to gasoline to remove some environmentally harmful emissions, and prices are closely linked to the motor fuel.
Wholesale gasoline dropped to $256/$264 yesterday on the Rotterdam barge market, down from six-month highs last week. Gasoline traders say the market is overbought.
But the factor between European MTBE and gasoline also moved below the average 1.4, down from around 1.55 last month, as the blending component dropped faster.
"MTBE lost more ground, as there's no support from the States with the arb closed, and there's high stock levels in Europe," said another trader.
He said there were seven or eight sellers against one buyer, with poor end-user demand. "There's not a lot of blending going on, so there's a (price) correction," he said.:
