Products: Jul 19-21: Gasoil gains on Australia stable demand
The differential for MR-size cargoes of 92RON gasoline on an FOB North Asia basis went up. Talks on spot cargoes lacked the momentum due to poor demand in Southeast Asia. As COVID-19 was spreading out in Indonesia or Vietnam, demand in the countries were declining, so that imports of spot cargos were slowing down. Almost no spot purchases had been confirmed from Southeast Asia. Meanwhile, supply from Northeast Asia was said to be increasing on the back of firm gasoline refining margins. In addition, refiners in China were possibly going to make moves to sell cargoes, who had been reluctant to sell cargoes due to a lack of export quota of oil products. As reported, the government had reportedly granted the second quota of a total volume of 9.50 mil mt of oil products this year.
The differential for LR-size cargoes of naphtha on an FOB Middle East basis unchanged. However, a sense of tight supply/demand remained strong due to active purchases by Northeast Asian end-users. In the region, several petrochemical firms bought cargoes to be delivered in the second half of August or in the first half of September one after another. A market source said that end-users were increasing procurements of naphtha in part due to less supply as there had been heard some refineries' troubles in the region. In addition, gas demand of gasoline was increasing in Asia, more market players were possibly going to look for naphtha as feedstock of gasoline.
The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB North Asia basis went up on tight supply/demand fundamentals amid few cargoes in Asia. In Australia, one of the main outlets for cargoes from Northeast Asia, shipment of jet fuel stayed firm due to stable demand, while production of gasoil was running short. Although demand of gasoil in Northeast Asia stayed sluggish, some demand was still seen in the area outside of Asia. In the meantime, it was reported that ENEOS might have around one cargo for sale loading in August. Earlier, the company had been said that it was inactive sell cargoes due to some troubles at its refineries. As the company was reconsidering supply schedules at home and where the exported cargo would be loaded.
The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was unchanged. Sources said that SK Energy still seemed to be selling VLSFO in the bunker fuel market at low prices on the back of high inventories. However, it was pointed out that some refiners in the country were concerned about intensive price competitions as they were reluctant to sell volumes at extremely low prices.