Gasoline: Demand increases from SE Asia on refineries TA

The differentials for MR-size cargos of 92RON gasoline on an FOB Northeast Asia were unchanged on week. Demand from Southeast Asia was increasing due to regular maintenance activities of refineries. The 300,000b/d refinery of RAPID project in Malaysia had been shut down since January for a trouble, followed by turnaround that was scheduled to continue till March. In Indonesia, regular maintenance was scheduled in February. Meanwhile, buyers in Southeast Asia were likely to be increasing their procurements in Singapore. On the supply side, no sales for cargoes loading in March were witnessed in Northeast Asia. Due to high freight rates of vessels, downward pressures were strengthening on FOB basis prices, and refiners stayed in a wait-and-see stance.

Naphtha: Premium narrows on expected weaker demand

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 $9.00-10.00/mt to Japan quotations to be assessed 45 days before delivery. The premium tended to shrink. An expectation strengthened that demand for naphtha would decrease. It was informed that petrochemical companies in the country would probably cut the operation rates of naphtha crackers as naphtha refining margins were capped. Actually, one petrochemical company reportedly decreased the run rates by 5% at one cracker in February compared to January. A market participant mentioned that decreasing run rates became a sudden bearish factor and it might push down the naphtha market prices.

On the other hand, operation rates in Japan were pointed out to remain the lowest level and it was hard to decrease the rates further. However, some companies showed a negative stance to raise run rates.

Middle distillates: GO cargoes for Singapore market decreasing

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis were unchanged. In South Korea, oil companies had yet to start full-fledged talks on cargoes loading in March. Most sellers remained hesitant to sell cargoes on an FOB basis due to continued high freight rates. SK Energy, GS Caltex, and other refiners were planning to sell cargoes loading in March, but "full-scale sales would not start until after the holidays" some market sources added.

The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis went up on steady Europe gasoil markets. Taiwan's Formosa Petrochemical Corp (FPCC) had sold an MR-size cargo of 0.001% sulfur gasoil cargo loading on Mar 1-5 at a discount of around $1.20/bbl to the quotations on an FOB basis via a tender. According to a source, cargoes loading in the Middle East and India were also headed to Europe. Decreasing cargoes for Singapore induced inquiries for Northeast Asian cargoes.

The differentials for MR-size cargoes of 0.05% sulfur gasoil on an FOB Northeast Asia basis slightly rose. Demand from Southeast Asia continued with regular maintenance or troubles at refineries.

Fuel oil: 0.5%S FO from Al-Zour for Feb traded

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis stayed in the same level as Feb 2. No negotiations were observed in the FOB South Korea market. Meanwhile, in the last week, Kuwait Petroleum Corporation (KPC) sold 130,000mt of 0.5%S fuel oil for loading on Feb 13-14 at its 615,000 barrel-per-day Al-Zour refinery. Those cargoes were purchased by Phillips 66. As previously reported, in late January, KPC had distributed 130,000/mt 0.5%S fuel oil for loading on Feb 8-9. The company was accelerating the export from the refinery. As a result, "the market would see more ample availability of low sulfur fuel oil from here on," a source said.