GASOLINE

The differentials for MR-size cargoes of gasoline on an FOB Northeast Asia basis rebounded after they had been deemed undervalued. China National Offshore Oil Co (CNOOC) sold an MR-size cargo of 92RON gasoline loading on Aug 8-9 from South China at a discount of 30cts/bbl to Singapore quotations on an FOB basis. West Pacific Petroleum Co Dalian also sold an MR-size cargo of 92RON gasoline loading on Aug 9-11 from Dalian through a tender. The price was at a discount of around 75cts/bbl to the same quotations. In Taiwan, a fire broke out at the 80,000b/d residue desulfurization unit at Formosa Petrochemical Co's 540,000b/d Mailiao refinery on Wednesday. It seemed hard for the company to restart the unit within this year.

NAPHTHA

In the Northeast Asian spot market, YNCC in South Korea was reported to have procured naphtha arriving in second-half August at a premium of $12.5/mt to Japan quotations with unknown volumes. An Asian oil company said that CFR Japan naphtha prices were declining to a premium in the low $10's/mt. On the back, shrinks in ethylene crack margins and lower liquefied petroleum gas (LPG) prices were cited as factors of receding naphtha demand.

MIDDLE DISTILLATES

The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis softened on expectations that supply/demand fundamentals would slacken. A market source said that 0.001% sulfur gasoil loading in August from South Korea was traded at a premium of around 30cts/bbl to Singapore quotations on an FOB basis. The cargo was said to be brought into Southeast Asia. As the COVID-19 was spreading again in Asia, demand was expected to decline. Another refiner in South Korea said that a bid for 0.001% sulfur gasoil was heard as high as flat to the quotations. However, as each refiner cut its production of gasoil, spot supply was few, and no sellers seemed to accept the bid level.

FUEL OIL

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was at a premium in the range of $55.00-65.00/mt to Singapore quotations. SK Energy in South Korea resumed the operation of vacuum residue desulfurization (VRDS) unit after turnaround, and the company was considering to raise run rates for its refinery to little more than 80%. Following this, supply of 0.5% sulfur fuel oil was prospected to increase. Meanwhile, Formosa Petrochemical Co (FPCC) occurred a fire at its No.2 residue desulfurization (RDS) unit, therefore the company shut down the unit to investigate the cause. The details and the impact to supply side were unsure for now.

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