Gasoline: Non-oxy grade market strengthens

The differentials for MR-size cargos of Non-oxy gasoline on an FOB Northeast Asia basis all went up. Less exports from the region including Japan and South Korea pushed up the market. In Japan, whereas several refineries' troubles had taken place, shipments of gasoline in the domestic market stayed firm. Lower inventories caused limited export availability. In South Korea, as mentioned before, refiners were focusing on term supply during the summer season. In the spot market, Formosa Petrochemicals Co (FPCC) in Taiwan sold two 250,000bbl cargoes of non-oxy grade 92RON gasoline loading on Sep 16-20 and Sep 21-25. Those cargoes seemed to be co-loaded in an LR-size vessel. In South Korea, Hyundai Oilbank was conducting a tender to sell an MR-size cargo of alkylate loading in late September.

Naphtha: Unit glitch seems to push down prices

Open-spec naphtha prices on a CFR Japan basis declined. A view was heard that a glitch hit one naphtha cracker in Japan this week and it would probably push down the market prices. However, the extent of the glitch was still unclear and the actual impact on supply/demand fundamentals was still up in the air as well. According to a source, fresh resale was not heard after the glitch at the naphtha cracker.

The differential for LR-size cargoes of naphtha on an FOB Middle East basis was unchanged on week. According to a market participant, large maintenance activities were scheduled at refineries in Iran, Iraq and Russia from October to November and refining and supply volume of oil products were expected to decrease. In the meantime, ADNOC processed heavy crude oil at its Ruwais refinery and export volumes of naphtha were decreasing from the oil company, it was pointed out.

Middle distillates: Jet prices gains with wider arb to EU

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis gained from last week. Declining freight rates pushed up the market prices on an FOB basis. In addition, the arbitrage window for Europe was getting wider. SINOCHEM in China reportedly sold one MR-size cargo loading in early September. CNOOC was heard to try to sell at least one cargo loading in South China in September.

In Brazil, BP Bunge Global, a subsidiary of British oil major BP, announced on Aug 9 that it would invest BRL 530 million or $94.49 million in the plant in Pedro Afonso, Tocantins state. The plant is one of 11 plants operated by BP in Brazil, and the investment would enable the company to compress 3.40 mil mt of sugar cane in one harvest. BP announced that the expansion will begin in October this year and it will be completed in July 2026.

The differential for MR-size cargoes of 0.05% sulfur gasoil on an FOB went down on decreasing buying interest. Inquiries from major buyers such as Indonesia and Vietnam were sluggish. In Vietnam, refineries were operating smoothly, but demand for end-uses such as factories was scarce In South Korea, some oil companies began selling September-loading cargoes. GS Caltex sold two MR-size cargos for Sep 7-11 and 13-17 loading through a tender. SK Energy also sold one MR-size cargo for Sep 1-3 loading.

Fuel oil: VLSFO demand anticipated to rise in China

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was unchanged on week. The underlying tone, however, was solid with expectations that China's appetite would improve. According to an industry source, China was likely to import actively cargoes of very low sulfur fuel oil (VLSFO) in September, continuing from Aug. Chaina's oil companies curtailed the refining volumes as margins of low sulfur fuel oil (LSFO) were flagging in Asia. Under the circumstances, players, who provide VLSFO cargoes to the local bunker fuel market, seemed to secure more cargoes in overseas markets. On the other market front, two South Korean oil firms apparently dealt SR-size cargoes of LSFO, as previously reported. The details including prices and shipping destination were unknown for now.