GASOLINE

The differentials for MR-size cargoes of 92RON gasoline on an FOB North Asia basis were unchanged. Some sales were heard from China. On Monday, the Chinese government granted the second export quotas of oil products this year, so that oil companies in the country were resuming exports of them. The total amounts of the quotas were 10.50 mil mt including a combined 7.50 mil mt of gasoline, jet fuel and gasoil and 3.00 mil mt of low sulfur fuel oil. West Pacific Petroleum Co Dalian (WEPEC) in China issued a sell tender for an MR-size cargo of 92RON gasoline loading in August. The tender closed on Wednesday. Meanwhile, spot purchases from Southeast Asia remained weak. The pandemic of COVID-19 was serious in Indonesia and Vietnam, and demand of gasoline in the region was declining. Therefore, spot purchases from the region had not been seen for a while.

NAPHTHA

Naphtha prices were weakening in Northeast Asia. Amid the outbreak of COVID-19, it was speculated that demand of petrochemical products was peaking out. At the stage of expansion of COVID-19 this time, infections of the virus in China were serious, so that a market source pointed out that supply/demand fundamentals of petrochemical products in China were worrying. Meanwhile, while discussions were shifting to cargoes for early October delivery from late September one in Asia, the source said that a sense of oversupply of naphtha was emerging in the US as the gasoline demand season was winding down, and the excess volumes of naphtha in the country could be headed to Asia going forward.

MIDDLE DISTILLATES

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis were supported by inquiries for cargoes for the US West Coast. On the other hand, the differential for jet fuel on an FOB Taiwan basis softened due to poor demand in Asia as cargoes from Taiwan were rarely bought into the US.

The differentials for MR-size cargoes of 0.05% sulfur gasoil on an FOB North Asia Basis weakened on sluggish demand. Demand for spot cargoes was weak in Southeast Asia due to the pandemic of COVID-19. Exports from Vietnam, usually in an import position, were seen in the market.

FUEL OIL

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was unchanged. In South Korea, price competitions between SK Energy and S-Oil for VLSFO were ongoing. Although SK Energy was staying the refinery run rates in the percentage of low 70's due to an expectation that demand would slump on the outbreak of variant of COVID-19, the yield of low sulfur fuel oil was maintained at the maximum level. As reported, the company was planning to increase the sales volume of VLSFO in August to 350,000-40,000mt compared to the previous 200,000mt per month on the average. In the meantime, S-Oil was operating its 669,000bbl Onsan refinery at almost the full capacity, and supply of low sulfur fuel oil was abundant. Under such a circumstance, a sense of oversupply was not likely eased. In Japan, there were no movements such as Cosmo Oil and so on were exporting low sulfur fuel oil to South Korea.