Gasoline: Korean refiners consider additional sales for Oct

　The differential for MR-size cargos of 92RON gasoline on an FOB Northeast Asia basis went down. Demand in the northern hemisphere was retreating as the driving season was already over. Supply from Northeast Asia especially in China was on the decline, but cargoes from the Middle East were still flowing into Asia. Therefore, a sense of tight supply was unlikely to strengthen soon. Exports from China in October were expected to be only at above 700,000mt. In the country, domestic demand increased during the National Foundation Day holidays and inventories at refineries were low. In addition, export margins were poor, so that refiners seemed to be curtailing their exports. In South Korea, some refiners including SK Energy was reportedly considering to export additional cargoes loading in October. Due to a recent upward trend in international crude oil prices, it was possible that the South Korean government could extend the tax cut policy on oil products that had been initially scheduled to be lifted at the end of October. Oil companies in South Korea seemed to be considering that the last-minute demand at home was unlikely to take place, and were willing to export cargoes from their inventories that had been built up. The government was likely to make final decision on the policy next week.

Naphtha: Concerns about possible supply disruption from ME considered

The market prices for open-spec naphtha for delivery in the second half November remained steady on week. Israel and Iran were colliding and the situation of the Middle East continued to be unstable. Market participants showed a view that possible supply disruptions of naphtha from the Middle East were concerned with rising geopolitical risks. In the meantime, the operation rates of refineries were capped due to some glitches or poor refining margins.

Although demand for naphtha for petrochemicals and gasoline lacked strength, some factors on the supply side supported the market prices. In the spot market, one 25,000mt cargo of open-spec was traded at a premium of slightly higher than $6.00/mt to Japan quotations on a CFR Japan basis.　　　

Middle distillates: 0.05%S gasoil market is steady on buying interest from SE Asia

The differential for MR-size cargoes of jet fuel on an FOB Northeast Asia basis did not change. No fresh deals were heard on Wednesday. Japan was staying in an import position and Japanese refiners had currently no spot availability. According to a source, Japan became a short position after ENEOS's Wakayama refinery and Seibu Oil's Yamaguchi refinery had been shut down. In this situation, Japanese companies imported cargoes with term contracts from other countries like South Korea. The differential for SR-size cargoes of kerosene on an FOB South Korea remained steady. The temperature in West Japan this winter attracted attention. This winter, another Japanese refiner planned to have regular maintenance at its refinery and it was probable that inventories of kerosene would likely decrease faster in oil terminals in the region when the cold wave and the severe weather would hit the region.

　The differential for MR-size cargoes of 0.05% sulfur gasoil on an FOB Northeast Asia basis was stable. Southeast Asian refiners were showing buying interest in high sulfur gasoil, and the market was stable. Vietnam's Petrolimex and Indonesia's Pertamina showed buying interest for loading and delivery on second half October and early November. While there was buying interest, selling interest was limited. Refineries tended to curb their supply of high sulfur gasoil as prices for jet fuel oil hovered above those for 0.05% sulfur gasoil.

Fuel oil: LSFO market sentiment remains weak

　The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis remained steady. However, it was still believed that selling pressures would rise at no distant date. Kuwait Petroleum Corporation (KPC) was believed to ship a few cargoes of very low sulfur fuel oil (VLSFO) on Suezmax tankers during late October to November. KPC regularly exports a couple of cargoes including term ones every month. South Africa and West African countries recently ramped up their export volumes of base material of VLSFO, which were freighted to the Middle East and other areas. As a result, the Middle East would apparently forward more VLSFO cargoes to Asia hereafter.