Gasoline: Tighter fundamentals push non-oxy grade prices up

The differential for MR-size cargoes of non-oxy gasoline FOB Northeast Asia went up. Supply/demand fundamentals were expected to be tighter. In Japan, some troubles happened at crude distillation units or fluid catalytic crackers at refineries of ENEOS, Idemitsu Kosan and Cosmo Oil. A market participant believed that those troubles would make sentiments firmer. One MR-size cargo of 92RON loading in mid-June had been traded at a premium of around $1.50/bbl to the quotations on an FOB Japan basis.

In the US, energy fundamentals were getting tight. According to weekly statistics released by American Petroleum Institute (API) on Wednesday, stocks of crude oil decreased by 4.24 mil bbl and those of gasoline decreased by 550,000bbl from the previous day, unexpectedly. A market source said that it was a bullish factor.

Naphtha: Market goes up with continues spot procurements

The first half July open-spec naphtha prices on a CFR Japan basis strengthened. Buying interest continued in the spot market. YNCC in South Korea bought one 25,000mt cargo of open-spec for delivery in the first half July at a premium of $8.00/mt and three 25,000mt cargoes for delivery in the second half July via a tender. Lotte Chemical conducted a buy tender for the first half July-delivery and UNIPEC in China also conducted a buy tender for the first half July delivery cargoes to Tianjin and Yangshan.

In Japan, Cosmo Oil's Chiba refinery was shutting down its 102,000bbl-per-day No.2 crude distillation unit. According to a market source, the operations stopped on May 22. On the other hand, Maruzen Petrochemical that received naphtha from the Chiba refinery had no plan to buy additional naphtha.

Lotte Chemical Indonesia was conducting start-up of its new naphtha cracker. According to a source, the company was likely to be able to confirm on-spec of ethylene this weekend, delaying around one week from an initial plan.

Middle distillates: 500ppm GO price softens as buying interest from Vietnam expected to fall

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis became softer on increasing supply. China state-owned PetroChina set its June sales plan at 900,000mt, slightly higher than May. The company was taking an aggressive stance on exports due to recent strong crack margins. Some refiners and traders in South Korea still had some cargoes for sale loading in the month and they were likely to move on sales of them going forward. It was pointed out that sellers in Japan were considering their sales in June. A major refiner in the country was possibly going to sell an MR-size cargo loading in West Japan.

The differentials for MR-size cargoes of 0.05% sulfur gasoil on an FOB Northeast Asia basis went down on increasing supply. GS Caltex sold two MR-size cargoes of 0.05% sulfur gasoil loading on Jun 9-13 and on Jun 25-29. A trader speculated that buyers in Vietnam had actively procured cargoes for bargain hunting/. The trader said that Vietnamese traders intensively moved on purchase of 0.05% sulfur gasoil cargoes as the market had been undervalued when crude oil prices went down. However, inventories of gasoil in the Southeast Asian country were on the rise without any factors to tighten market such as an extreme rise in demand or refineries' shutdown or troubles. In addition, a temporal hike in the differential caused weaker buying interest and the market turned into the downward trend again.

Fuel oil: Slack fundamentals push down market

The differential for MR-size cargoes of 0.5% sulfur fuel oil weakened. A sense of slack supply/demand fundamentals pushed down the market. In South Korea, the refineries' maintenance season was getting over. In addition, refining margins of low-sulfur fuel oil hovered high, so that refiners in the country were producing more low-sulfur fuel oil. On the other hand, demand of bunker fuel was sluggish in the country. Further, demand for power generation in Japan was also weak. Compared to prices for fuel oil, those for coal and liquified natural gas remained cheaper on a calorific basis. Refiners in the country supply ample volumes of fuel oil to power plants, so that there were no movements to import cargoes. Some refiners in South Korea were considering sales of June loading cargoes on the back of high inventories.