Gasoline: Two CHN oil firms likely to increase exports

Differentials for gasoline on an FOB Northeast Asia basis were stable on week. The third batch of export quotas by the Chinese government was fewer than expected, so that a part of Chinese oil companies was taking time making export plans. According to a market source, PetroChina and Sinopec were likely to increase exports, but CNOOC was unlikely to expand exports because the refiner had few batch left.

Naphtha: Decreasing Russia cargoes push market up

The first half November open-spec naphtha prices on a CFR Japan basis were pulled up by decreasing supply from Russia. Several refineries in the country were attacked by Ukraine drones and supply capacity had declined. One South Korean petrochemical company bought 25,000mt of open-spec for delivery in the first half of November at a premium of $7.75/mt to the first half October quotations on a CFR basis.

China increased import volumes on year. According to data by China's General Administration of Customs, the naphtha import volumes in August was 1.57 mil mt, down 8.06% on month and up 16.25% on year. From January to August, the cumulative import volumes were 10.87 mil mt, increasing by 27.70% on year. In the country, according to a market source, an independent refining company Shandong Yulong Petrochemical was heard to confirm on-spec products of ethylene from its new No.2 naphtha cracker with the ethylene production capacity of 1.50 mil mt-per-year (mt/y).

Middle distillates: Idemitsu buys early Oct jet fuel cargo

The differential for MR-size cargoes of jet fuel on an FOB Northeast Asia basis went down. Sales from Chinese companies were increasing, and supply in Asia became ample. Sinochem reportedly sold an MR-size cargo loading on Oct 2-4 through a tender at a discount of around 80cts/bbl to the quotations on an FOB basis to Japan's Idemitsu Kosan. The cargo was to be loaded at the refinery of West Pacific Petroleum Co Dalian (WEPEC). Sinochem conducted another sell tender for one MR-size cargo loading on Oct 11-13.

Ｉｎ talks on 0.001% sulfure gasoil, the differential on an FOB Japan basis softened as sales volume increased in middle this week. In late this week, however, ENEOS would possibly reduce exports of middle distillates. Its Mizushima refinery B plan with a capacity of 202,000bbl-per-day had a glitch at a tank of fuel oil raw material and had shut down operations of a coker.

Fuel oil: Supply for high sulfur decreases

The differential for MR-size cargoes of 3.5% sulfur fuel oil (380cst) on an FOB Japan basis was unchanged. However, the market fundamentals were strong due to signs of decreasing supply. Surplus fuel oil for exports from Russia was decreasing due to Ukrainian drone attacks on refineries and oil terminals in Russia. It was seen as inventories in Singapore were likely to decrease.

In Japan, Kansai Electric Power Co announced that it would close an oil-fired thermal power plant in Wakayama. It was expected that demand of fuel oil for power generation would decline further.