GASOLINE

The differentials for MR-size cargoes of gasoline on an FOB North Asia basis were unchanged. Some demand was seen in Japan. A Japanese trading house needed to buy an MR-size cargo, but a deal had yet to be heard due to high offers and freight rates. Offers for cargoes from South Korea loading in September were heard at a premium of around $1.50/bbl to Singapore quotations on an FOB basis. Meanwhile, it was pointed out that refiners in India could increase imports of gasoline. As the outbreak of COVID-19 was calming down and gasoline demand was expected to increase as lockdown in the country was being eased. In Northeast Asia, refiners in China were still said to be selling cargoes loading in August. It was reported that Zhejiang Petroleum & Chemical, which had started operations last year, sold three LR-size cargoes of 92RON gasoline loading in August to date.

NAPHTHA

Naphtha prices were softening in Northeast Asia. The outbreak of COVID-19 was still spreading in the region including China, and demand of petrochemical products was retreating. Therefore, not many end-users in the region seemed to be active to buy naphtha as feed stock of petrochemical products. On the other hand, a sense of tight supply/demand fundamentals of naphtha was easing in the US as the summer gasoline demand season was getting over. Surpass volumes of naphtha was said to be flowing into Asia. Meanwhile, the price gap between naphtha and liquified petroleum gas (LPG) was widening in favor of LPG. Recent weak market fundamentals were expected to continue for the time being.

MIDDLE DISTILLATES

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis gained. Amid poor jet fuel refining margins, refiners in Northeast Asia were reluctant to produce jet fuel, and the number of spot cargoes loading in September seemed to be few. On the other hand, the arbitrage window for cargoes to the US West Coast remained open. Therefore, traders were still working to procure cargoes for the US.

The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB North Asia Basis weakened on higher freight rates. A sense of oversupply in the spot market was emerging in Northeast Asia amid the pandemic of COVID-19 in each country in the region. Sellers in South Korea were making moves to sell cargoes, and their prices were inching down.

FUEL OIL

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis weakened amid a sense of supply surplus. In South Korea, SK Energy was emphasizing to sell more VLSFO for bunker, and they were increasing the sales volumes in August compared to July. In addition, recently the arbitrage cargoes to Asia were increasing. In reaction to these situations, prices for 0.5% sulfur fuel oil as feedstock for VLSFO were under pressure of oversupply. One of South Korean oil companies viewed that the differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was down to a discount in the range of $25.00-35.00/mt to Singapore quotations (0.5%S).