GASOLINE

The differentials for MR-size cargoes of gasoline on an FOB North Asia basis weakened. As demand in Southeast Asia was declining due to the pandemic of COVID-19, purchases for spot cargoes were poor. On the other hand, oil companies in China had resumed exports of gasoline, so that supply in Northeast Asia was increasing. On Monday, West Pacific Petroleum Co Dalian (WEPEC) in China issued a sell tender for two MR-size cargoes of 92RON gasoline loading in September with its price validity date set on Tuesday. In Taiwan, it was revealed that Formosa Petrochemicals Co (FPCC) had sold 250,000bbl of 93RON gasoline loading in late September last Friday at a premium of around 65cts/bbl to Singapore quotations on an FOB basis.

NAPHTHA

In the Northeast Asia market, term contracts on a CFR basis were being discussed. China National Offshore Oil Corporation (CNOOC) was conducting a term buy tender starting from January to June or January to December next year for paraffinic naphtha with a paraffine content at 75%. The tender was scheduled to close on Aug 25. Previously, CNOOC had struck a one-year term buy tender starting from September at a premium of $11-12/mt to Japan quotations on a CFR basis. The company owns a 1 mil mt per year naphtha cracker next to its refinery. A source in Northeast Asia viewed that prices for term cargoes would be at a mid-single digit premium to Japan quotations, judging from softening CFR Northeast Asia prices. In addition, the source pointed out that CFR Japan prices were relatively low as the intermonth spread was in contango, so that some end-users were possibly going to move to buy at this timing. Meanwhile, another source saw that some petrochemical makers in Japan had high inventories or the operation rates of their naphtha crackers were not reaching to their full capacity after troubles, so that they were slow to seek.

MIDDLE DISTILLATES

The differentials for MR-size cargoes of 0.05% sulfur gasoil on an FOB South Korea basis gained

as the market had been undervalued. On Monday, GS Caltex in South Korea closed sell tenders for 300,000bbl of 0.001% sulfur gasoil loading on Sep 24-28 and two 300,000bbl cargoes of 0.05% sulfur gasoil loading on Sep 11-15 and 18-22. Meanwhile, Hyundai Oilbank issued a sell tender for two MR-size cargoes of 0.001% sulfur gasoil loading in September. The tender was scheduled to close on Thursday. Last week, the company sold 300,000bbl loading on Sep 8-10 through a tender. Amid the outbreak of COVID-19, domestic demand in South Korea was sluggish, and exports were increasing.

FUEL OIL

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis weakened on a sense of oversupply. In South Korea, SK Energy was increasing the monthly sales volumes of VLSFO in August more than double from 200,000mt until the previous month. Most of them were supplied in the bunker market, but some of the surplus volumes were being planned to export as 0.5% sulfur fuel oil cargoes.