MTBE market in 'panic-mode' after hitting 16-year low: sources

London — The European MTBE market plunged to a more than 16-year low Thursday, leaving market participants in "panic-mode" as the global energy and financial markets went into meltdown due to the coronavirus pandemic.

S&P Global Platts assessed MTBE down $104.5/mt on the day at $330.75/mt FOB ARA Thursday. That was down 24% on the day and 48.95% lower than a week ago.

The MTBE premium over the Eurobob April swap fell $23/mt on the day.

"With the whole energy complex getting crushed, it is probably logical that the premium will reduce," a producer said.

The flat price of MTBE hit its lowest since January 2, 2004, Platts data showed.

Trading sources said industry was in "panic mode" and that the industry doesn't know which direction to take, amid sharp losses in gasoline and crude oil markets. The low spot price combined with a contango structure would typically encourage buying activity and storage, especially ahead of next month's gasoline specification change from winter to summer.

Traders were reluctant to take positions, "especially any that involve owning any oil," a source said.

In related energy, crude oil traded lower on Thursday, amid the continuing escalation of the coronavirus pandemic and downward revisions for oil demand growth in 2020.

Platts assessed Brent crude down 11.67% on the day and 40.19% week on week to close at $30.805/b Thursday.

Eurobob gasoline followed suit, falling $77.50/mt or 24.16% on the day to $243.25/mt.