Gasoline: Markets down with oversupply

　The differential for MR-size cargos of oxy gasoline on an FOB Northeast Asia basis were down. From this month, buying interest of Indonesia, one of the main importers of gasoline, was weakening. On the supply side, no trouble was heard at refineries in Northeast Asia and Southeast Asia at present. Thus, supply/demand fundamentals remained loose. In addition, cargoes were flowing from India and the Middle East to Singapore. A market participant pointed out that the gasoline market in Europe was bearish as well, so that there were quite limited destinations for cargoes from the Middle East and India. The current soft market would continue for a while.

　The differentials for Non oxy gasoline weakened. Supply/demand for non-oxy gasoline was also slack due to large volumes of supply from South Korea and Japan. In addition, stronger freight rates for clean products weighed on the market on FOB basis cargoes as well.

Naphtha: Slack fundamentals of heavy grade naphtha retreating with fewer US cargoes

　The heavy grade naphtha prices on a CFR Japan basis went up. A sense of slack supply/demand fundamentals was retreating because supply from the US to Asia decreased. In China, it was heard that a part of companies raised the operational rates of their reformers as the price spread between naphtha and aromatics such as paraxylene and benzene. The PX market was pushed up by stronger PTA market sentiment.

　The open-spec naphtha prices on a CFR Japan basis were unchanged. However, the widening price spread between naphtha and aromatics was considered as a positive factor. In South Korea, Hanwha TotalEnergies (HTC) was heard to be considering increasing the operational rates of naphtha crackers to 100% in February, 6% points higher than the initial plans. A market participant mentioned that this might be along with a recent rise in derivative styrene monomer (SM) prices.

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. Sales of February loading cargoes by Chinese players were active. Meanwhile, GS Caltex in South Korea sold an MR-size cargo loading on Feb 11-15 through a tender. The buyer was Cosmo Oil in Japan. Cosmo had earlier planned to buy only one MR-size cargo loading in the first half of February, but the company had to buy an additional one in a hurry. Its 100,000b/d Sakai refinery had suffered from malfunction of the Coker unit since late January.

　The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis were unchanged. Sales from China continued. Sinochem had sold a 0.001% sulfur gasoil cargo loading on Feb 11-15. The company had resumed the operations of its 300,000b/d Quanzhou refinery on Jan 25, and its operations were smoothly improving. Large-scale maintenance activities had been conducted at the refinery since Nov 25. Prior to the maintenance, a fire had occurred there. Meanwhile, as reported before, PetroChina was not planning to export any cargoes for February loading, and it was not showing any selling interest.

Fuel oil: High sulfur fuel oil supply expected to decline amid political instability

　The differentials for MR-size cargoes of 3.5% sulfur fuel oil (380cst) on an FOB South Korea basis went up. The differential strengthened in line with a rise in the Singapore market on the back of an expected supply decline from regions outside Asia. Recently, political situations across the globe were worsening, and supply of fuel oil to Singapore was expected to decline. Therefore, traders were willing to buy cargoes. In addition to the political unrest in Iran, that in Venezuela and difficulties of peace talks between Russian and Ukraine were also perceived as bullish factors for the market.