Gasoline: Oxy grade prices fall down due to retreating buying interest

The differential for MR-size cargos of 92RON gasoline on an FOB Northeast Asia basis went down on week on weaker buying interest. Inventories in Singapore were increasing in part because traders still had some volumes to sell in the market and more cargoes were flowing into Asia from regions outside Asia such as the Middle East. Therefore, traders were curtailing their fresh procurements.

Refiners in Japan kept the operation rates of their refineries high, while demand of gasoline remained sluggish. Therefore, refiners were actively exporting excessive volumes. For cargoes loading in January, ENEOS and Idemitsu Kosan were planning to sell three MR-size cargoes each.

In China, the government notified the first export batch of oil products for 2025, so that exports in January were likely to increase from December.

Naphtha: Prices weighed with a fall in naphtha crackers' operation rates

The first half February open-spec naphtha prices on a CFR Japan basis stayed in the same level. However, weaker demand capped the market prices. Lotte Chemical in South Korea bought at least two 25,000mt cargoes of open-spec for delivery in the first half February at a premium of $1.50/mt on a CFR Yeosu basis and at a premium of $2.25/mt on a CFR Daesan basis to the quotations to be assessed 30 days before via a tender closed on Monday.

In Southeast Aisa, shutdown continued at several naphtha crackers due to declining profitability. JG Summit in the Philippines seemed to shut down its naphtha cracker soon. In South Korea, one company reduced the operation rates of its naphtha crackers. In China, it had yet to be heard that there were procurements for new naphtha crackers that started operations during October and November. Market participants had a view that the operation rates of naphtha crackers in other counties would go down when Chinese petrochemical companies raised the operation rates and increased production volumes of petrochemical products, so that consumptions of naphtha were expected not to increase enough.

In the condensate markets, one of competitive feedstocks against naphtha, Shell tried to sell North West Shelf condensate (NWSC) loading on Feb 25-Mar 1. According to market sources, buyers had already secured naphtha that was at lower prices than condensate, so that buying interest for NWSC was pointed out to be decreased.

Middle distillates: More sales push all products' prices down

The differential for MR-size cargoes of jet fuel on an FOB Northeast Asia basis was falling down. A market participant pointed out that stronger selling interest from China and increasing sales volumes from India made market sentiment softer. In the Singapore futures market, prices for jet fuel were around $1.65/bbl lower than that for 0.001% sulfur gasoil. The fixed prices for jet fuel including differentials became lower than that for 0.001% sulfur gasoil in the region as well.

The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis softened on slack supply/demand fundamentals. Whereas some sellers were willing to sell cargoes, buyers seemed not to be in a hurry procuring cargoes as they perceived that more cargoes were expected from China going forward. Oil companies in Northeast Asia, including Japan and South Korea, increased productions and sales volumes amid high crack margins of middle distillates, leading to increasing supply.

The differential for MR-size cargoes of 0.05% sulfur gasoil on an FOB Northeast Asia basis declined. Buying enquiries from Southeast Asia, including Indonesia, calmed down. The weakness of jet fuel market also made it easier to increase supply of high sulfur gasoil. GS Caltex in South Korea sold one 300,000bbl cargo of 0.05% sulfur gasoil for loading on Jan 26-30 at a discount of around $1.60-1.70/bbl to the Singapore 0.001% sulfur quotations on an FOB basis.

Fuel oil: HSFO talks lack momentum for FOB Korea

The differential for MR-size cargoes of 3.5% sulfur fuel oil (380cst) on an FOB South Korea basis was unchanged. No fresh negotiations were detected for high sulfur fuel oil (HSFO) loading in South Korea. With the combination of continuously sluggish demand for HSFO and limited spot availability in Asia, the market did not see little change in prices. South Korea's oil companies apparently continued to prefer shipping cargoes to the bunker fuel market, where prices were profitable for them. Moreover, Northeast Asia was expected to see more fuel oil cargoes going forward because some local refineries were forced to stop their secondary units due to a fire. However, many players seemed to view that the impact from the fire would not be so serious enough to provide more cargoes to the Asia spot market, according to an industry source.

Market News

The Chinese government notified the first export batch of oil products in 2025 in the Wednesday afternoon, several market sources told Rim Intelligence. The total volume of clean products including gasoline, jet fuel and gasoil was at 19.00mil mt, the same as that in 2024. Among them was 5.80 mil mt for PetroChina (up 20,000mt on year), 7.54 mil mt for Sinopec (up 100,000mt), 1.65 mil mt for CNOOC (down 50,000mt), 1.93 mil mt for Sinochem (down 130,000mt), 60,000mt for CNAF (unchanged), ZPC for 1.67 mil mt (down 60,000mt) and 350,000mt for NORICO (up 120,000mt) The total volume of low-sulfur fuel oil stood at 8.00mil mt. Among them was 3.82 mil mt for Sinopec (down 10,000mt), 3.44 mil mt for PetroChina, 700,000mt for CNOOC (up 20,000mt), 20,000mt for Sinochem (unchanged) and 20,000mt for ZPC (down 40,000mt).