Gasoline: Oxy grade prices jump on tight supply

The differential for MR-size cargos of 92RON gasoline on an FOB Northeast Asia basis was jumping up from Mar 22 on tight supply. Exports from China in April were expected to decline as the maintenance season of refineries would set in in the country ahead of summer. Some large-scale refineries of PetroChina group, one of the main sellers of gasoline, were scheduled to have turnaround. Therefore, it was informed that exports by the company would be less than 300,000mt in the month. In the meantime, inflows from the Middle East or India were declining. Further, falling freight rates were supporting the market.

Naphtha: Sentiment softens on strong selling interest

Open-spec naphtha prices on a CFR Japan basis were at a premium of $15.00-16.00/mt to Japan quotations to be assessed 30 days before deliver and at a premium of $8.50-9.50/mt to the quotations to be assessed 45 days before delivery. Strong selling interest weighed on the market.

Japan's petrochemical company bought 25,000mt of open-spec naphtha for delivery in the first half May at a premium of low $10's/mt to the quotations on an FOB basis via a tender. Several sellers offered at lower prices than the current market level. They seemed to have surplus sales cargoes and showed strong selling interest. In Northeast Asia, regular maintenance was scheduled at some naphtha crackers. Due to troubles, several companies decreased the operation rates of naphtha crackers and one company planned to shut down its naphtha cracker. In addition, another petrochemical company was heard to be considering to cut the running rates of its crackers because of narrowing margins. Thus, the consumption volume would decrease.

Middle distillates: JPN trading house has buying interest for SR-size kerosene

The differential for MR-size cargoes of jet fuel on an FOB China basis went down on strong selling interest. According to sources, domestic demand for jet fuel lacked strength in the country and refiners seemed to increase exports.

The differential for SR-size cargoes of kerosene on an FOB South Korea basis was unchanged. One Japanese trading house showed buying interest for SR-size cargoes. The company was considering to import the fuel as inventories of kerosene were about to be running out in Hokkaido as inventories had been brought out. However, it remained unprofitable for trading houses to import SR-size cargoes from South Korea to Japan, so that the trading house actually had a hard time securing cargoes.

The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis gained on the back of decreasing freight rates of MR-size vessels. In addition, Japanese oil companies were curbing their sales due to maintenance activities of their refinery, which also supported the market. SK Energy in South Korea sold two MR-size cargoes loading on Apr 27-29 and on Apr 29-May 1 last week. Both cargoes were traded at a discount of $1.95/bbl to the quotations on an FOB basis, and the buyer was planning to allocate the cargoes to Australia.

Sales of April-loading cargoes in Northeast Asia had almost finished. Only a small amount of cargoes remained to be unsold by Chinese oil companies. Exports in April from China were expected to remain at around 700,000 mt. The first batch of export quotas was limited, but it was not clear if the second one would be notified by the government. Under these circumstances, oil companies were exporting cautiously.

Fuel Oil: HSFO supply pressure lingers in Asia

The differential for MR-size cargoes of 3.5% sulfur fuel oil (380cst) on an FOB South Korea basis was stable in the level on week. Most players still held off on engaging in discussions on high sulfur fuel oil (HSFO) cargoes for loading in South Korea. The market was believed to have limited availability of spot cargoes for the near term as some South Korean oil companies planned to start regular maintenance activities at their refinery from April. Contrastingly, however, Singapore and other trading hubs in Asia faced ample supply, tending to suffer from digesting inventories. As previously reported, sellers in Kuwait, Indonesia and so on were offering some cargoes for loading from April. Despite the fact that the cargoes were only a few, negotiable price levels also seemed to be hovering at a low level in talks for loading in Northeast Asia.