Gasoline: Increasing procurements for Mexico push up oxy grade prices

The differential for MR-size cargos of 92RON gasoline on an FOB North East Asia basis strengthened. The differentials for cargoes of oxy-grade gasoline were pushed up as demand in the regions outside Asia such as Mexico were increasing. Due to the recent strong market, the backwardation structure between Aug/Sep contract in the paper swaps market in Singapore was widening to $1.60/bbl. With the arbitrage window for cargoes from Asia to the US West Coast staying open, purchases for cargoes to Mexico continued. State-owned Pemex was said to have already procured five or six MR-size cargoes loading in August in China and Singapore. This week, in Northeast Asia, PetroChina sold an LR-size cargo of 92RON gasoline loading from Dalian.

Naphtha: FPCC shuts down No.2 cracker

Open-spec naphtha prices on a CFR Japan basis were weak. Demand was capped because the operation rates of naphtha crackers did not increase and several glitches happened at crackers. Especially in Japan, some naphtha crackers had issues.

In Taiwan, Formosa Petrochemical Corp (FPCC) shut down the No.2 naphtha cracker on Thursday. CPC Co reportedly planned not to procure cargoes for delivery in September. Although the arbitrage window from Europe was shrinking, downward pressures on the market were extending at present.

Lotte Chemical in South Korea bought naphtha for delivery to Yeosu and Daesan in the first half September via a tender closed on last Wednesday. In Japan Asahi Kasei Mitsubishi Chemical Ethylene Corp (AMEC) secured 25,000mt of open-spec naphtha for delivery. AMEC reportedly issued a buy tender for a term contract for cargoes to be delivered from October to March next year.

Middle distillates: Jet ｍarket goes down with ample supply from China

The differential for MR-size cargoes of jet fuel on an FOB Northeast Asia basis went down. Strong selling interest from China pushed down the spot market. Sales by Chinese refiners for cargoes loading in late August continued. West Pacific Petroleum Co Dalian (WEPEC) sold one MR-size cargo for Aug 24-26 loading through a tender closed on last Wednesday. China National Offshore Oil Corp (CNOOC) sold an MR-size cargo loading on Aug 28-30. Sales volumes by Chinese refiners were high. They were expected to reach about 1.7 mil mt including those to Hong Kong. The arbitrage window from Asia to other regions was closed, resulting in limited inquiries and slack supply/demand fundamentals. It was also a bearish factor for the market that purchases of August cargoes by Japanese refiners were seen as almost over.

A major renewable energy firm Neste announced that it supplied sustainable aviation fuel (SAF) to a facility in Thessaloniki, Greece which a major energy company Helleniq Energy in the country owns. This was the first time for Neste to bring the fuel in bulk using ships into the country.

The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia went up.

Lower freight rates pushed up the differentials on an FOB basis. Last Friday, Formosa Petrochemicals Co (FPCC) in Taiwan sold an MR-size cargo loading on Sep 5-9 and 750,000bbl loading on Sep 18-22. On last Thursday, CPC Co also sold 450,000bbl loading on Sep 1-10 through a tender at a discount of around 65cts/bbl to the quotations. In South Korea, SK Energy conducted a tender to sell two MR-size cargoes loading on Aug 14-16 and Aug 26-28 that closed on Thursday, but the tender was reportedly canceled. The company tried to sell cargoes due to sluggish demand at home, but decided not to sell the volumes in the international market because of cheaper-than-expected prices.

Fuel oil: Prices buoyed by less selling pressure

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis strengthened. The market moved upward as excess cargoes were decreasing to some level in Singapore and other Asia trading hubs. Asia markets saw dropping cargoes provided from the Middle East, where demand for generating electricity was lately increasing, according to a player familiar with the matter. The room for upside, however, would be limited because players' appetite for bunker fuel and fuel oil for power generation remained weak, an industry source pointed out.