Gasoline: Less demand and high freight push prices down

The differentials for non-oxy gasoline on FOB basis in Northeast Asia were pulled down on week by retreating demand and higher freight rates. While buying interest in cargoes for Australia had been stronger, turnaround of the RFCC at the Geelong refinery in Australia was scheduled to finish in early October. Meanwhile, inquiries from Japan were slowing down.

In the spot talks, one MR-size cargo of 92RON gasoline loading during middle and late October was traded at a premium of around 90cts/bbl to the quotations on an FOB Japan basis. In Japan, a sense of tight supply retreated as troubles of refining facilities had been resolved. Thus, available cargoes for exports were heard to recover for October-loading compared to August or September-loading.

On the other hand, Formosa Petrochemical Corp (FPCC) in Taiwan started turnaround at a secondary unit on Sep 10.

Naphtha: bullish factors supported markets

The second half October open-spec naphtha prices on a CFR Japan basis were unchanged. However, some bullish factors supported the market. New naphtha crackers were scheduled to start up in China. BASF planned to conduct trial operations of its new naphtha cracker in the country during October and December. A market participant said that this facility would depend on waterborne naphtha and LPG. Meanwhile, it was heard that a cargo was supplied from Kuwait to the facility.

Market sentiment was also heard to be steady in Europe. In the region, naphtha was consumed for refining gasoline because inquiries for gasoline in Europe increased for Africa. In Africa, Nigeria's Dangote refinery had glitches at the residue fluid catalytic cracker (RFCC).

In the spot talks, Baharat Petroleum Corp (BPCL) in India sold 33,000mt of naphtha for Sep 18-19 loading at a premium of around $20/mt to the quotations on an FOB Mumbai basis. According to a market source in the country, throughput of light grade crude oil from the US or UAE increased due to economic terms and the yield and sales of light distillates increased in the country.

Middle distillates: Jet fuel arbitrage for US West Coast expands

The differentials for MR-size cargoes of jet fuel on an FOB North East Asia basis went up. Sales from Chinese refiners were scarce, limiting cargoes loading in for Northeast Asia in the first half of October. The market was also supported due to the expansion of the arbitrage window from Asia to the US West Coast. Multiple regular maintenance activities were scheduled in the US West Coast, and it was pointed out that inquiries for cargoes to the region were increasing.

The differential for SR-size cargoes of kerosene on an FOB South Korea basis gained. Ahead of the winter demand season, prices were pushed up. Buying interest emerged from Japanese oil refiners and trading houses both in the spot market and for term contracts. South Korean refiners were raising their offers.

The differential for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis were stable. The current gasoil market stayed firm as supply was limited as of now while the Chinese government had yet to notify the third batch of export quotas of oil products in addition that not many oil companies were moving to sell cargoes loading in October. Meanwhile, cargoes from India were flowing to Europe or Africa, so that few cargoes from the South Asian country were going to Asia.

Fuel oil: Inventories in Singapore hovering high

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was unchanged. However, market sentiment was weak on plentiful supply. Inventories of fuel oil stood high in Singapore, and it was likely that it would take time to digest them. Prices for low-sulfur fuel oil were on the decline now in Singapore that had been temporarily increasing.

However, middle sulfur fuel oil for blending was running short as reported before. Amid this, sales from Vietnam continued. Nghi Son Refinery Petrochemical Ltd (NSRP) conducted some sell tender and tried to sell cargoes.