Gasoline: SR-size gasoline market rises on declining supply

The differential for MR-size cargos of 92RON gasoline on an FOB Japan basis went down with strong selling interest. According to market participants, traders in South Korea and the Middle East were promoting sales recently. Several cargoes were reportedly coming into Singapore from the Middle East and Africa and a sense of oversupply remained prevailing. For mid-March loading cargoes on an FOB Japan basis, the possible deal level for 92RON gasoline was heard at a discount of around $1.00/bbl to the quotations.

The differential for SR-size cargoes of 90RON gasoline on an FOB South Korea basis went up since supply volumes from the country were expected to decrease going forward. Several refineries planned turnaround in March. Meanwhile, a part of oil firms was inactive to export the fuel because the export margins were poor. According to a market participant, for March loading, the offer level rose to a premium of $2.40/bbl or higher to the quotations on an FOB basis.

In Japan, Idemitsu Kosan's 140,000bbl-per-day Hokkaido refinery was heard to have trouble at the fluid catalytic cracker (FCC).

Naphtha: More inquiries push up market amid fewer supply from the Med Sea

The differentials for LR-size cargoes of naphtha on an FOB Middle East basis strengthened. Buying interest for the Middle Eastern cargoes became stronger because supply from the Mediterranean Sea decreased. In spot talks, Qatar Energy sold two 75,000mt cargoes loading in March. One was full range and another was GTL naphtha and light. The first one was awarded at a premium of $35/mt and the last one was traded at a premium below $30/mt to the quotations on an FOB basis.

The first-half April open-spec naphtha prices on a CFR Japan basis were at a premium of $7.50-8.50/mt to Japan quotations to be assessed 45 days before and the prices were at a premium of $12.25-13.25/mt to Japan quotations to be assessed 30 days before, both unchanged from the previous day. The market for April delivery was pointed out to be firm. It was possible for a part of Japanese companies to have stronger buying interest for April delivery than March delivery because the fiscal year of 2026 would start in April and a part of them planned to finish turnaround of naphtha crackers. Meanwhile, while the gasoline market remained weak, demand for naphtha as a gasoline raw material would increase ahead of the gasoline demand season in northern hemisphere going forward.

The first-half April open-spec naphtha prices on a CFR Japan basis. The market for CFR Japan April delivery was pointed out to be firm. It was possible for a part of Japanese companies to have stronger buying interest for April delivery than March delivery because the fiscal year of 2026 would start in April and a part of them planned to finish turnaround of naphtha crackers. Meanwhile, while the gasoline market remained weak, demand for naphtha as a gasoline raw material would increase ahead of the gasoline demand season in northern hemisphere going forward. On the other hand, a view was shown that room of a rise in prices would be limited because several naphtha crackers in Asia such as South Korea continued to reduce the production. In the country, LG Chem reduced the average operational rates of naphtha crackers at the Yeosu plant. A market source mentioned that whether the reduced operation was due to a malfunction in the crackers or a malfunction in the derivative facilities was unclear.

Middle distillates: High production costs for high flash point jet to US concerned

The differentials for MR-size cargoes of Northeast Asia weakened from last week. Sales from Northeast Asia continued while the kerosene demand season was getting over. It was also perceived as a bearish factor that Chinese players would start full-fledged talks from next week.

A market source said that the arbitrage window for cargoes from Asia to the US West Coast was narrowing comparing with January and February, although it was still marginally workable. As reported, the 157,000b/d Martinez refinery in California operated by PBF Energy was scheduled to shut down for turnaround in early March, and supply concerns were expected to retreat. Some market players had had buying interest for high flash point jet fuel to refiners in South Korea since last year as constant inquiries from Northeast Asia to the US would be expected. Meanwhile, some market players had expanded capacity of storage tanks to pile up high flash point products. On the other hand, some oil companies in Northeast Asia said that it would be hard to take profits to sell them due to the high production costs.

　The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia went down. One sale after another from South Korea pushed down the market.

Some Japanese oil companies were planning to sell some cargoes loading in March. The total number of cargoes was expected to hit more than 10 MR-size. Among them for loading in early March. The operations of secondary units at Idemitsu Kosan's 140,000b/d Hokkaido refinery were low. It was pointed out that malfunctions of the hydrogen production unit had happened, which was expected to continue till now. However, the company did not seem to rearrange the export schedules or volumes that had been earlier fixed as its exports were mostly to be loaded in Chiba and the West. The company was not planning to import any volumes for short-covering, either.

Fuel oil: Cosmo considers sales loading in early Mar

The differential for MR-size cargoes of 3.5% sulfur fuel oil on an FOB Japan basis unchanged.

Cosmo Oil in Japan considered exporting an MR-size cargo of high sulfur fuel oil loading in early March. The refiner was expected to issue a tender to sell going forward. Trouble of a cocker unit continued at the 100,000b/d Sakai refinery. For this reason, the refiner could not process heavy distillates and seemed to export surplus products that were difficult to digest in the country. The firm had recently moved to sell 42,000mt of 3.5%S fuel oil loading on Feb 16-18. This cargo was exported from the Kanokawa terminal. Other Japanese oil companies continued to export feedstocks and finished products loading in late February to early March. Idemitsu Kosan reportedly stopped the operations of the fluid catalytic cracker (FCC) at the 140,000b/d Hokkaido refinery. Amid this situation, market sources said that exports of heavy distillates might increase. The refiner exports about three MR-size cargoes of feedstocks and finished products a month.