Products: Dec 2-6: Naphtha crack widens on refiery shutdowns
The differential for MR-size cargoes of 92RON gasoline on an FOB China basis was unchanged. Refiners in Northeast Asia were talking on spot cargoes loading in January. On Wednesday, a refiner in China sold an MR-size cargo of 91RON gasoline loading in early January at a discount of 50cts/bbl to Singapore quotations on an FOB basis. CPC Co in Taiwan was conducting a sell tender for 30,000mt of 92RON gasoline loading in January. No offers for cargoes loading in January from South Korea were reported to date.
With regard to a recently widening spread in naphtha against Brent crude prices, an Asian trader cited tight supply as a bullish factor as the completion of maintenance works on the Ras Laffan refinery by Qatar Petroleum (QP) and the Jubail refinery by Saudi Aramco were delayed from end-November to mid-December. It was also factored that arbitrage volumes to Asia for January were expected to be limited. Further, it was cited that in addition to planned turnarounds for refineries in Europe and the Middle East, a series of troubles at the refineries in the US would cap the supply surplus to Asia.
The differentials for MR-size cargoes of 0.001% sulfur gasoil on a Northeast Asia basis were unchanged. Discussions on cargoes loading in January started, but no fresh deals were reported. A market source said that some traders seemed to be considering procurement of 0.001% sulfur gasoil cargoes from Northeast Asia to be brought into Australia. However, a trader pointed out that there were some cargoes supplied from India and the Middle East, so that prices for cargoes from Northeast Asia would not increase sharply.
The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis rose. Although no fresh deals for 0.5% sulfur fuel oil were heard, the market tone was strengthening on tightness in supply. Meanwhile, several deals for 0.5% sulfur fuel oil were done through consecutive days in the Singapore fuel oil market. The price was at a premium of $2/mt (Dec-average) to Singapore quotations (0.5% sulfur fuel oil). In case of the equivalence to Singapore quotations (180cst), a market source reckoned that 0.5% sulfur fuel oil prices on an FOB Singapore and Korea bases were at a premium of more than $270.00/mt.