Gasoline: Oxy market weighed by oversupply

　The differentials for MR-size cargos of Northeast Asia were unchanged on week. However, the market was weighed by oversupply of February-loading cargoes. Several sales were seen from South Korea and the export volume from China was expected to be around 500,000mt. Ample supply was expected to continue until talks on cargoes for February because limited refineries were scheduled to have turnaround until the month.

On the demand side, Indonesia state-owned Pertamina conducted a buy tender for 100,000bbl of 92RON for delivery on Jan 29-31. The result was not revealed. Pertamina was conducting turnaround at the Balongan refinery. According to a market source, the company planned to expand the capacity of the refinery in some phases. According to the source, the current crude distillation capacity was 125,000 bbl-per-day (b/d) and the company seemed to target to expand the CDU capacity to 150,000 b/d in the first phase.

Naphtha: JPN buying interest weak ahead of some T/A

　The prices declined to be assessed 30 days before. Some market participants pointed out that supply was enough from the Middle East and the operational rates of refineries in Asia remained high. On the other hand, several petrochemical companies such as Keiyo Ethylene and Crasus Chemical planned to have regular maintenance of the naphtha cracker and import volumes were on the decline. While Mitsubishi Chemical was also scheduled to conduct turnaround of the naphtha cracker, the company could receive enough inventories of naphtha with term contracts.

In Japan, a part of petrochemical companies continued to feed butane as feedstocks. One company had procured around 12,000 mt-per-month of butane for delivery during January and March in November last year. Meanwhile, no company was heard to newly consider buying butane in the spot market because the current butane market was strong.

In the spot talks of naphtha, Lotte Chemical Indonesia conducted a buy tender for naphtha for delivery in the second-half February on last Tuesday. The awarded price was heard to be at a discount of around $4.00/mt to the quotations on a CFR basis. Purchased volume was not revealed. On last Wednesday, Lotte Chemical moved on buying naphtha for the second-half February delivery.

Middle distillates: Selling pressures by ample supply push down gasoil market

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis went down. Refiners in Northeast Asia were actively moving to sell jet fuel, so that supply was ample in the region. In The Singapore paper swaps market, regrade, the price gap between kerosene and gasoil, hovered at around a premium range for February contract, and profitability to refine and sell jet fuel was favorable comparing to gasoil.

The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis went down. All price falls were attributed to strong selling pressures amid ample supply of February loading cargoes as refineries in Northeast Asia were focusing on productions of middle distillates.

Fuel oil: Supply concerns continue, fundamentals stay bullish

The differential for MR-size cargoes of 3.5% sulfur fuel oil on an FOB Japan basis was unchanged on week. But market fundamentals were bullish, as concerns of supply continued.

Discussions of US president Trump about Iran were seen as a strong factor. Previously Venezuela situation and difficulties of peace negotiations between Russia and Ukraine had pushed up the market.

In Northeast Asia, Formosa Petrochemical Corp (FPCC) in Taiwan sold 40,000mt of 3.5%S fuel oil loading on Jan 14-30 via a tender on last Tuesday. The price was reportedly at a discount of $15.00/mt to the Singapore quotations on an FOB basis.

In Japan ENEOS Corp moved to sell cargoes loading in late January. But specifications and quantity were unclear. The firm continuously exported feedstocks such as vacuum residue (VR) and low sulfur straight run fuel oil (LSSR). Idemitsu Kosan also continuously exported high sulfur fuel oil and feedstocks because of production capacity of their secondary units. The company had sold cargoes loading in January.