Gasoline: More sales and high freights push markets down

The differential for MR-size cargos of 92RON on an FOB Northeast Asia basis went down. While demand for other regions including Mexico disappeared, sales volumes for July-loading cargoes continued to increase. Hovering high freights were considered to be a bearish factor as well.

In China, WEPEC sold one MR-size cargo of 92RON gasoline loading on Jul 10-12 at a premium of 55cts/bbl to the quotations on an FOB basis via a tender. According to a market participant, since talks on July-loading was about to finish, demand for prompt cargoes was almost fulfilled and market prices declined. On the other hand, no fresh deal for August-loading cargoes was heard.

Naphtha: Cargoes from other regions abound

The first half August open-spec naphtha prices on a CFR Japan basis were weakened. Supply/demand fundamentals did not tighten as cargoes from other regions were considered to be ample.

Hanwha TotalEnergies conducted a buy tender for heavy full range naphtha for delivery in the first half of August. It was heard that the awarded prices for C grade were at a premium of around $7/mt to the quotations on a CFR basis. A market participant pointed out that the differentials for C grade would be pushed down as supply from the Mediterranean Sea was increasing. Another source mentioned that the awardable prices for the grade were believed to have been at a premium in the mid-$10's/mt when Iran and Israel had battled.

In South Korea, Korea Petrochemical Ind Co Ltd (KPIC) moved on buying a cargo in the spot market on the Wednesday evening and was likely to have bought a cargo for delivery in the first half of August at a premium of around $4/mt to the Jul 9-15 quotations on a CFR basis.

LG Chem conducted a buy tender. In Japana, two or three end-users were considering purchasing August-delivery cargoes. According to one petrochemical company, supply from domestic refineries did not increase a lot because Japanese oil firms needed to consume a lot of naphtha to produce gasoline at refineries that were under operations as usual. As reported before, several refineries currently had glitches or turnaround.

Middle distillates: Market improves as backwardation expected to retreat

The differential for MR-size cargoes of jet fuel on an FOB Northeast Asia basis slightly went up late last week. The timing spread between July and August contract in the paper market narrowed compared to some time ago, and a sense of the bearish market was receding. PetroChina subsidiary Dalian West Pacific Petrochemical (WEPEC) sold two MR-size cargoes loading in Jul through a tender.

The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis increased. The timing spread between Jul/Aug contracts was slightly narrowing in the Singapore paper swaps market as tensions in the Middle East were slightly eased. Supply of 0.001% sulfur gasoil from Japan was limited. ENEOS was unlikely to be actively moving to sell cargoes loading in July due to some unit troubles at their refineries.

Fuel Oil: Sluggish demand pushes down market

The differential for SR-size cargoes of 0.3% sulfur fuel oil on an FOB South Korea basis went down. Power companies in Japan were still buying cheap coal or liquified natural gas (LNG) as fuels for power generation, and trading houses were inactive to import fuel oil. In the spot market, an SR-size cargo of 0.3% sulfur fuel oil loading in late July from South Korea. S-Oil Co sold two 26,000mt cargoes of 1.5% sulfur slurry oil loading on Jul 9-13 and Jul 27-31 via a tender.