Gasoline: Oxy gasoline prices up with decreasing sales from China

The differential for MR-size cargos of 92RON gasoline on an FOB Northeast Asia basis went up on expectations that exports from China would decline. In the country, exports by PetroChina, one of the main sellers of the fuel in the country, were expected at around 170,000mt in December, and total volumes from the country could only be at around 400,000mt. The freight rates were on the decline as exports in December from China were declining. The rates of MR-size vessels between South Korea and Singapore hovered at around $1.60/bbl.

Naphtha: Loose fundamentals slightly push prices down

The second half January open-spec naphtha prices on a CFR Japan basis slightly went down on week. Supply/demand fundamentals continued to be loose and market prices were subdued. Demand in Northeast Asia did not increase at present. In South Korea, one petrochemical company was heard to be considering its production system including shutdowns of some facilities. According to a source, the company reduced the operation rates of naphtha crackers to around 75% this month. In Japan, one petrochemical company seemed to be operating its naphtha cracker at about 70% due to issues of facilities.

In China, some new naphtha crackers had initially been scheduled to start commercial operations between October and December this year. However, according to a source, several naphtha crackers delayed to start operations in the country and no purchase for a new naphtha cracker that started operation up was heard at present.

On the other hand, according to a source, the maintenance season of refineries was almost over in Europe and production was increasing. Another source mentioned that light crude oil was flowing from Africa into Europe.

Middle distillates: Both prices for jet fuel and 0.001%S gasoline down

The differential for MR-size cargoes of jet fuel on an FOB Northeast Asia basis declined. Inquiries for cargoes to the US were on the decline as the arbitrage to the US West Coast was narrowing. Inquiries for cargoes from Japan as alternative of kerosene in December were settling down as well, and the premiums looked temporarily narrower.

The differential for SR-size cargoes of kerosene on an FOB South Korea basis increased. Inquiries from Japan were on the rise as the winter demand season kicked off in the country. Meanwhile, sellers in South Korea were raising their offers. In Japan, it was informed that Idemitsu Kosan was willing to buy cargoes loading in December due to some unit troubles at its 140,000b/d Hokkaido refinery. That might support the market as well.

The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis softened on increasing supply. Cargoes were flowing from the Middle East and India to Singapore because sellers could not sell cargoes to Europe. In Europe, turnaround of refineries had almost ended and supply was recovering but demand for heating oil did not increase enough as the temperature repeatedly rose and fell. According to a source, TotalEnergies' Feyzin refinery in France ended maintenance activities on Dec 2.

Sales volumes of January-loading cargoes were expected to increase from December because a new batch of exports quotas would be released in China and Chinese oil companies would be able to export cargoes. Reflecting it, demand for ships was expected to increase as well.

Fuel oil: LSFO prices fall under SE Asia's selling pressures

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis weakened compared to Nov 29. Growing expectations of strong supply dragged the prices lower. In Asia, many players projected abundance of 0.5%S fuel oil after the market lately faced more cargoes shipped from Southeast Asia in addition to Northeast Asia, according to one market participant familiar with the matter. In Southeast Asia, Vietnam's Nghi Son Refinery and Petrochemical (NSRP) had a tender to sell 37,000/mt of straight-run low sulfur fuel oil (LSFO). It was a rare case for NSRP to offer straight-run LSFO, an industry source pointed out. Besides this, LSFO offers were seen for loading in Malaysia in the market.

In the talks of MR-size cargoes of 3.5% sulfur fuel oil (380cst) on an FOB South Korea basis, oil companies in the country appeared to prioritize shipping high sulfur fuel oil (HSFO) to the bunker fuel market due to HSFO's prices which were hovering at higher levels than the export cargo market, a trade source noted. However, oil companies occasionally struggled to sell blending base material in addition to HSFO since the bunker fuel market seemed to reach its peak regarding HSFO demand, according to a market participant familiar with the matter.