Gasoline: Oversupply weighs on market

The upper side of the differentials for MR-size cargos on an FOB Northeast Asia basis remained capped. Selling interest was still seen from Japan and South Korea. Chinese oil companies were expected to start full-fledged sales soon. In addition, freight rates for vessels for clean products tended to go up and it capped the market on an FOB basis. Based on the high operational rates of refineries, oversales would continue until talks on February-loading.

CPC Co in Taiwan bought one MR-size cargo of 95RON gasoline for delivery at the end of January at a premium in the range of $7.00-8.00/bbl to the 92RON quotations on a CFR basis. The oil firm was delayed to restart the 80,000 bbl-per-day (b/d) residue fluid catalytic cracker (RFCC) at its 350,000 b/d Talin refinery, so that it seemed to move on a purchase for short-covering. It was expected to try to resume operations next week.

Naphtha: CNOOC buys 150kt for 1H March delivery

The first-half March open-spec naphtha prices on a CFR Japan basis were unchanged. It was hard to forecast the naphtha market direction because both bullish and bearish factors were mixed, an oil firm mentioned. Based on the weak olefin market, it was seen that several companies continued to cap the operational rates of naphtha crackers in Northeast Asia and Southeast Asia. On the other hand, the impact when the consumption tax would be imposed on domestically produced naphtha for petrochemicals in China was not confirmed. On the supply side, turnaround was scheduled in South Korea and India from March, and production volumes were expected to decrease.

In spot talks, China state-owned CNOOC bought two 75,000mt cargoes for delivery in the first-half March in the low single-digit premium to the Japan quotations on a CFR basis. Through the tender, the company would buy 50,000-75,000mt. CNOOC had procured 200,000mt for delivery in the second-half February in the spot market. Those procurements were considered to be made in anticipation of the new naphtha tax under consideration by the Chinese government. It was reported that CNOOC had 2.11 mil mt for the first batch of import quotas in 2026.

Middle distillates: Jet fuel flowing from ME or India into East due to retreated EU demand

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis sharply went down. One MR-size cargo loading on Feb 26-28 from South Korea was traded at a discount of 55cts/bbl to the Singapore quotations on an FOB basis.

Supply/demand fundamentals for cargoes loading in mid to late February from Northeast Asia were rapidly slackening. On the back of favorable refining margins, refiners in the region were active to refine and export jet fuel. On the other hand, buying interest by Japanese and European companies was weak. In Europe, inventories levels were high, so that procurements for cargoes from the Middle East and India were so limited. Those cargoes tended to flow into Asia.

It was reported that securing berth was getting hard in the US West Coast. As market players in the US had procured abundant high flash point products for loading from late January to early February, berth congestion in the area was getting serious. Although the arbitrage window from Asia to the US West Coast remained open, some viewed that it was hard to transport fresh cargoes to the US from mid to late February in terms of berth operations.

The differentials for MR-size cargoes of gasoline on an FOB Northeast Asia basis were unchanged. However, a sense of ample supply/demand capped the market.

Fuel oil: CPC sells 0.5%S and 0.35%S

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was flat on week. But there were both weak and strong factors and movements were poor in the market. Bunker demand increased in Singapore as exports of petroleum products increased. But inventories remained ample, and it weighed down the market.

CPC Corp in Taiwan sold 20,000mt of 0.5%S fuel oil and 17,500mt of 0.35%S fuel oil loading on Feb 1-5 via a tender. A trader reportedly bought them at a narrow discount to the quotations on an FOB basis. The buyer seemed to bring the cargoes such as in Singapore and use them for blending feedstocks.