Gasoline: 91RON SR-size traded at +$2 FOB Japan basis

The differentials for MR-size cargos of 92RON gasoline on an FOB Northeast Asia basis remained same level on week. Refiners in Northeast Asia were gradually moving to sell cargoes loading in January, but discussions were still inactive as no sales from China, one of the main exporting countries in the region, were still witnessed. It was still unclear how many volumes Chinese oil companies would export next year, and one of the oil companies said that it had a hard time fixing its export plans in January. Meanwhile, PetroChina reportedly sold an MR-size cargo of 91RON gasoline loading in late January at a premium of $2.00/bbl to the quotations on an FOB basis.

Naphtha: Markets rising on significantly tight cargoes

Open-spec naphtha prices on a CFR Japan basis were at a premium of $18.50-19.50/mt to Japan quotations to be assessed 30 days before delivery and at a premium of $12.00-13.00/mt to the quotations to be assessed 45 days before delivery. Supply for prompt cargoes significantly tightened and the market prices continued to rise. One Japanese petrochemical company bought 25,000mt of open-spec naphtha for delivery for the first half February at a premium of mid-$10's/mt to the quotations on a CFR basis.

In the Middle East, maintenance activities were scheduled at refineries. On the demand side, it was heard that Chinese companies seemed to increase imports volumes. A source said that market sentiment would remain strong at least within December.

Middle distillates: No prospects when China to start sales for Jan cargoes

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia increased on week. In the spot market, selling interest in Northeast Asia in early January was limited. South Korean oil companies had low inventories after digesting their inventories toward the end of the fiscal year. As the winter demand season set in, the oil companies were focusing to fulfill supply through term contracts and domestic kerosene supply was another factor for limited sales of jet fuel. In addition, the Chinese government had not issued the first export quotas of oil products in 2024, so oil companies in the country had not sold any January loading cargoes. Under these circumstances, premium levels were likely to remain high.

Cosmo Oil in Japan announced that it reached an agreement with Thailand-based oil firm Bangchak Co to import sustainable aviation fuel (SAF) that is refined in the Southeast Asian country. The two companies had confirmed to have a relationship to consider the possibility of decarbonization businesses together this March. Cosmo's decision to import SAF is one of the joint businesses through the relationship.

The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis also rose. Sales volumes remained few and buying interest became strong. It was unclear when Chinese oil companies would start selling cargoes. In addition, sales from Japan, South Korea and Tiwan were limited.

Fuel oil: Ample LSFO supply expected

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis stuck in the same level. Specific talks were not detected even amid a time of negotiations on cargoes loaded in January. On the other hand, the market was purportedly receiving plentiful supply of low sulfur fuel oil (LSFO) as South Korean oil firms raised their operation rates at their refinery to 90% or more. Additionally, Kuwait National Petroleum Company (KNPC) seemed to boost its LSFO export from its Al-Zour 615,000 barrels-per-day refinery from January onward, as previously reported. This prosect would cause oversupply concerns, a market participant pointed out.