Gasoline: Market going forward unclear amid bullish/bearish factors mixed

The differential for MR-size cargos of 92RON gasoline on an FOB Northeast Asia basis were unchanged. Market sentiment going forward was unclear as both bullish and bearish factors were mixed. In China, the government was possibly going to notify the first batch of export quotas of oil products for the next year next week, but exports in January were unlikely to increase sharply. Refiners in the country were expected to curtail their exports loading in January as the Chinese New Year holidays would be scheduled late in the month. In addition, lower freight rates could support prices on an FOB basis. On the other hand, sluggish demand capped the upper side of prices. Demand in Southeast Asia such as Indonesia and Vietnam remained weak. Further, the off-demand season had set in in the Northern hemisphere and purchases for cargoes to regions outside Asia were also slow.

Naphtha: Sign of fewer sales cargoes surfaces

The second half January open-spec naphtha prices on a CFR Japan basis went up. A view was heard that sales volume would likely to decrease. The arbitrage cargoes from Europe would likely to decrease going forward. Talks on cargoes loading in January would start soon. According to a source, end-users in the region were decreasing stock level this month toward the end of the fiscal year and would move on restock naphtha in January. It was also heard that spot cargoes from the Middle East seemed to slightly decrease.

In this situation, Japan's Mitsui Chemicals reportedly bought one 25,000mt cargo for delivery to Chiba on Jan 25-31 at a premium of less than $4/mt to the quotations to be assessed 30 days before on a CFR basis via a tender closed on last Wednesday. YNCC in South Korea purchased total four cargoes for delivery from the second half January to the first half February. Hanwha TotalEnergies bought heavy full range naphtha for delivery in the second half January.

Middle distillates: 0.05%S GO down as buying interest calming down in SE Asia

The differential for SR-size cargoes of kerosene on an FOB South Korea basis was unchanged. The winter demand season had started in Northeast Asia and demand tended to increase. Japan's Idemitsu Kosan bought one MR-size cargo loading in China in late December. According to a market participant, the seller was China's Rongsheng Petrochemical. According to another source, the Japanese refiner bought at least four MR-size cargoes from China and South Korea.

The differential for MR-size cargoes of 0.05% sulfur gasoil on an FOB Northeast Asia basis weakened. Tight supply/demand fundamentals were receding as buying interest in Southeast Asia calmed down. Buying interest in Indonesia's state-owned Pertamina declined compared to December cargoes. The company's refinery operations rates were said to be stable except for the 360,000 barrels per day Balikpapan refinery. This appeared to lead to a decrease in short-cover buying volumes.

Fuel oil: 380cst extends drop amid increased supply expectation

The differential for MR-size cargoes of 3.5% sulfur fuel oil (380cst) on an FOB South Korea basis was deepening in the wake of falling FOB Singapore 380cst index. More players anticipated supply pressures to grow, helping to push the prices lower. High sulfur fuel oil (HSFO) market was temporarily overheated somewhat, but it finally calmed down, a participant said. Left-over HSFO cargoes were apparently shipped to Asia's trading hubs such as Singapore after summer demand for power generation slowed down in the Middle East, according to an industry source. On top of that, Russia's oil refineries were resuming normal operations after turnaround, increasing cargoes for the Mediterranean region little by little. Along with this, Asia apparently started to a feel of being full regarding HSFO cargoes.