GASOLINE

The differential for MR-size cargoes of 92RON gasoline on an FOB China basis was unchanged. Talks on cargoes loading in June were ongoing. This week, West Pacific Petroleum Co Dalian sold an MR-size cargo of 92RON gasoline loading on Jun 10-12 at a discount of $1.65/bbl to Singapore quotations on an FOB basis. The cargo as likely to have been traded at a low differential due to its prompt laycan. On Thursday, China National Offshore Oil Co closed a sell tender for an MR-size cargo of 92RON gasoline loading on Jun 29-30 loading from South China. On the other hand, no fresh purchases from Southeast Asia were confirmed.

NAPHTHA

In Asia, freight rates were sharply falling which had temporally surged. Meanwhile, gasoline demand was recovering in Europe and the US, so that demand of naphtha which was used as feedstock of gasoline was also strengthening. The volume arbitrage cargo of naphtha from the regions to Asia was expected to decline in July from June. A market source in Northeast Asia speculated that prices for cargoes to be delivered in the first half of July would go up. While supply remained tight, demand was also firm as YNCC in South Korea bought three cargoes.

MIDDLE DISTILLATES

The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis was up on tight supply. The market was becoming sellers' one on as spot supply was limited on the back of regular maintenance or production cuts at refineries. In Singapore, the differential kept increasing due to a lack of cargoes. As reported, on the other hand, demand in Australia was inching up. Meanwhile, an MR-size cargo of 0.001 % sulfur gasoil from South Korea was reportedly traded at a discount of 25cts/bbl to Singapore quotations on an FOB basis.

FUEL OIL

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was unchanged. In South Korea, although supply was declining due to low operation rates at refineries, prices were unchanged on the back of weak demand. Refining margins of fuel oil were worsening amid the rebound in crude oil prices. A market source said that the operation rate of SK Energy's refineries seemed to have dipped to the high 60's%. The rates of other refiners in the country hovered in the low 70's%. A source in the country said that the weak market could continue at least until July or August.

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