Methyl Tertiary Butyl Ether (MTBE) prices experienced significant gains in all key global markets--China, Singapore, the USA, and Saudi Arabia--for the week of May 16, primarily due to supply disruptions, higher crude oil prices, and seasonal demand anticipated to play a role.

MTBE prices in China increased by 7.5%, representing the largest weekly gain from all regions. The big price jump was supported by simulations of demand and supply. The recovery in international crude oil and gasoline prices buoyed market confidence in China, encouraging manufacturers to raise offers. Simultaneously, several producer shutdowns (Dechen, Shandong Yuhuang, and Huayi Chemical) caused significant supply disruptions. All of these factors led to a notable tightening in supply. The constrained domestic availability spurred export discussions, further fueling the bullish trend. On the demand front, recovering crude futures and increased gasoline consumption prompted refineries to hike diesel prices, while traders across the value chain rushed to restock, boosting transaction volumes.

In Singapore, MTBE prices increased by 1.5% on the back of increasing tightening supply-side factors. Seasonal maintenance of several major regional refineries reduced product availability, putting upward pressure on local MTBE inventories. As a center of gasoline trading and blending, sellers in Singapore were also holding onto MTBE pricing to protect good margins. In light of the firm pricing from sellers and reduced supply, the domestic market was experiencing continued strength during the week.

Prices in the US increased by 0.1%, thanks to increasing upstream energy costs, including crude oil and gasoline. The fundamentals from an MTBE standpoint remained fairly stable. Early-week optimism in the market because of positive trade news concerning US and China relations and expectations of increased summer gasoline demand pushed prices slightly higher. Despite a midweek tapering in sentiment and subdued actual demand, strength in energy futures was sufficient to maintain a marginal upward price movement.

In Saudi Arabia, MTBE prices gained 1.4% due to seasonal and structural factors. As summer approaches and electricity demand increases, the country is relying more on crude oil for power generation, taking away crude oil from the rest of the market and tightening crude supply. Burning crude instead of fuel oil, even with OPEC+ production growth in the background, supported higher domestic MTBE prices. Active export activity supported the prevailing bullish undertone in the Saudi market.

Overall, MTBE prices appear to have poise with upward resistance globally, largely in response to supply limits regionally, and energy prices broadly.