The U.S. Methyl Tertiary Butyl Ether (MTBE) Market witnessed substantial market fluctuations during the month of April, attributable to supply/demand changes, seasonal adjustments, and overall global economic conditions.

At the beginning of the month, MTBE prices were rising, spurred by diminishing domestic supply and strong responses from the fuel industry. Many refiners began to increase their MTBE purchases as they entered the summer gasoline blending period of fuel production and began the production of reformulated fuels to meet governmental environmental guidelines. Supply was constrained additionally by production problems at several MTBE production locations and delays in transportation. The diminished supply, coupled with rising prices of upstream energy products, fed into the bullish sentiment that domestic refiners were feeling.

About halfway through April, the landscape of the market dramatically shifted. Domestic supply increased despite a relatively steady production path, while fuel blend volume was starting to level off. Inventory levels were also growing, and refiners didn't seem as interested in replenishing their stocks as they had placed larger volumes in anticipation of summer demand or further increases. The availability of international opportunities also slowed as refiners were concerned with trade conditions and global economic outlooks.

In the following week, the situation continued to worsen. Global buyers continued to look for alternative sources, and U.S. suppliers were relegated due to tariff disputes and a decline in global buyers. The situation grew increasingly worse as there was quite little international offtake, and thus no domestic blending was needed. Potentially, there was a demand imbalance for MTBE - supply continued to accumulate as output was supported by refiners across the country, and the opposite, a lack of demand remained. MTBE prices continued to soften, and producers grew weary.

By the end of April, MTBE market conditions had shown signs of improvement. Supportive energy market fundamentals, such as lifts in crude and gasoline presented as conducive component markets, provided some support for blending component demand. A decreasing dollar improved appeal for American energy commodities, price support witnessed in equity markets provided better economic sentiment, and modestly better MTBE consumption, and relief from the knockdown from earlier.

While taking part is the better option, there is a certain amount of caution based on market developments. Uncertainty, as always, remains about U.S.-China trade developments, and uncertainty still exists in anticipation of future energy demands. MTBE market price recoveries have the uphill battle of regaining some level of resiliency, especially while the market remains reactive to any superficial domestic or foreign development.