Gasoline: China refiners start sales of Jul cargoes

The differential for MR-size cargos of 92RON gasoline on an FOB Northeast Asia basis was unchanged. With refining margins staying poor, refiners in Northeast Asia were inactive to sell cargoes loading in July. The margins stood at around $5.00/bbl over Dubai crude oil. In the spot market, China National Offshore Oil CO sold an SR-size cargo of 92RON gasoline with non-oxy grade from Hainan at a premium of around 50cts/bbl to the quotations on an FOB basis. This week, PetroChina's subsidiary West Pacific Petroleum Co Dalian (WEPEC) proved to have sold an MR-size cargo of 91RON gasoline loading on Jun 24-28 at a discount of $2.20/bbl to the quotations on an FOB basis. It was pointed out that refiners in China were exporting cargoes as domestic demand remained poor.

Naphtha: 1h Aug OSN traded at premium of mid-single digit in JPN

Talks on cargoes for delivery in the first half August started. pen-spec naphtha prices on a CFR Japan basis were stable. The operation rates of refineries were continued to be capped and supply volume for the fuel was decreasing. On the other hand, demand for gasoline was weak, so that naphtha, which was usually stocked and consumed as a gasoline raw material, was floating in the spot market, it was pointed out.

Two Japanese petrochemical companies bought 25,000mt of open-spec naphtha for delivery in the first half August at a single digit premium to the quotations to be assessed 45 days before on a CFR basis, respectively.

One Middle East oil company conducted annual term contracts from August with consumers. The price for full range naphtha was at a premium of high $20's/mt to the Middle East quotations.

Middle distillates: Exports from Japan expected to be few

The differential for MR-size cargoes of jet fuel on an FOB Northeast Asia basis was stable. Increasing supply pushed down the prices because refiners were raising the production yield of the fuel. However, in Europe, market prices of middle distillates including jet fuel were reportedly increasing. One South Korea refiner sold one MR-size cargo loading in late July at a discount of around $1.50/bbl to Singapore quotations on an FOB basis.

A US-based aviation transport service company Signature Aviation announced that it started supply sustainable aviation fuel to all business aviation that refuel at Los Angeles International Airport. SAF is supplied by a Finland-based renewable energy company Neste. The blended fuel consists of 30% SAF and 70% conventional jet fuel. This is the second case for Signature to supply SAF to all business aviation followed by San Franciso International Airport.

The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Aisa strengthened. A sense of loose supply/demand fundamentals retreated. One refiner in South Korea sold three MR-size cargoes loading on Jul 12-14, 15-17 and 17-19 at a discount of $1.50/bbl to Singapore quotations on an FOB basis. Market players seemed to consider that a sense of oversupply for the fuel would weaken going forward as sellers were recently focused on sales of jet fuel amid softer gasoil sentiment. Oil companies were said to continue to curtail the operation rates of refineries. In Japan, several refiners had maintenance activities or glitches of refineries, so that they had no avails to export cargoes in July, it was pointed.

Fuel oil: NE Asia LSFO loses ground on prospect of higher supply

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis went down. The market was weighed by expectations that supply would grow in Asia. A China's state-owned oil company was believed to increase bunker fuel oil productions along with a resurgence of cargoes from Europe and other areas. The company reportedly focused on enhancing the bunker fuel business, especially for supplying business of self-refining products in the country. In consequence, the company recently imported less cargoes of low sulfur fuel oil (LSFO) from South Korea.

Meanwhile, South Korea's oil firms tried to ship surplus cargoes to tanks located in Singapore, whereas "There is not enough space in tanks to absorb a desired amount of oil," a market player familiar with the matter said.