Gasoline: No inquiries for US seen by narrower arb

　The differential for MR-size cargos of 91RON gasoline on an FOB South Korea basis and the differential for 92RON gasoline on an FOB Japan basis unchanged on week. The market was weighed by gradually increasing supply. The operational rates of refineries remained high in Asia and production volumes of petroleum products including gasoline were pointed to be enough. In South Korea, SK Energy was selling cargoes loading in the first-half January with private negotiations.

　In other regions, according to a market source, the turnaround season almost finished in the US and Europe and oil companies were relatively smoothly operating their facilities. The market source said that oil companies had been running at high levels to produce gasoil, so that gasoline cargoes became surplus in the US.

　In the US, Flint Hills' Pine Bent refinery with a capacity of 375,000 bbl-per-day (b/d) had been conducting maintenance activities at the 50,000 b/d vacuum distillation unit during mid-October and mid-February. Marathon Oil was also having maintenance at the 606,000 b/d Garyville refinery until Dec 25 or Dec 26.

Naphtha: Middle East naphtha market remains soft amid weak demand

　The differentials for LR-size cargoes of naphtha on an FOB Middle East basis went down. Weaker demand pushed down the market. Demand in South Korea and Japan was weak. On the supply side, cargoes volumes that exported from Europe and the US increased. On the supply side, one crude distillation unit (CDU) with the capacity of 205,000 bbl-per-day (b/d) was expected to restart at the 615,000 b/d Al-Zour refinery in Kuwait until the end of December. While the 268,000 b/d Ras Laffan refinery in Qatar seemed to plan minor turnaround during February and March and available cargoes for spot sales would decrease, market sentiment was prospected to become bearish.

In Saudi Arabia, according to a source, Jafurah gas project was scheduled to newly start supplies for condensate in February or later. On the other hand, several market participants believed that sales volumes of naphtha would not increase from the new project. Naphtha was expected to be domestically consumed as a gasoline component, and the material would likely to be used at the new ethylene plant in Amiral petrochemical complex integrated with the SATORP refinery in the future. According to the official web-site of TotalEnergies, the ethylene production capacity was 1.65 mil mt-per-year and commissioning was scheduled to start up in 2027.

Middle distillates: Exports from China expected to increase after 1st batch for 2026 announced

　The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis went down. Supply/demand fundamentals were getting eased in Northeast Asia. Whereas buying interest in Japan was calming down, supply was increasing in some countries including South Korea, which was pushing down the market. Meanwhile, Chinese oil companies were expected to sell cargoes loading in January actively going forward.

The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis unchanged on week. Easing supply/demand fundamentals capped the market. As of Dec 24, the crack spread of gasoil was at $19.23/bbl, still hovering at the high level. Supply for gasoil might increase going forward.

　The Chinese government announced the first export batch of oil products in 2026 on Thursday. A total volume of clean oil was 19.00 mil mt and it was the same volume as that in 2025. Some market players pointed out that it was within expectations. PetroChina Co Ltd and China Petroleum & Chemical Corp (Sinopec) accounted for about 70% of the total export volume. Some market players expected that export volume of gasoil was likely to be the lowest among the clean oils. On the other hand, other market players said that due to the economic slump, demand in the country was slowing down. At this moment, Chinese petroleum companies were not moving to sell January loading cargoes.

Fuel oil: Sales from Southeast Asia remain dull

　The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was unchanged on week. The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was at a discount in the range of $45.00-55.00/mt to Singapore quotations (0.5%S), unchanged from last Friday. Fresh sales in Northeast Asia were limited, and petroleum companies were continuously inactive to sell fuel oil as cargoes on the back of poor refining margins compared to middle distillates.

　Sales from Southeast Asia did not surface. As reported before, the 300,000b/d Pengerang Petrochemical Company Sdn Bhd (PRefChem) in Malaysia resumed the operations of their residue fluid catalytic crackers (RFCC) by Dec 9. After this, the operation rates gradually rose, and sales of heavy distillates did not surface. Also, the 200,000b/d Nghi Son Refinery Petrochemical Ltd (NSRP) in Vietnam would finish conducting turnaround of several secondary units including the fluid catalytic crackers (FCC). The company had sold surplus fuel oil loading in November and December that arose through turnaround, although these supply might decrease.