Gasoline: All markets go up with tight fundamentals

　The differentials for MR-size cargos of gasoline on an FOB Northeast Asia basis all shoot up. A sense of tight supply was getting strong while buying interest was heard for Vietnam and the Philippines, Southern hemisphere one of the importing countries of gasoline. Supply from China would disappear due to China government asked oil companies to restrict exports of oil products on Mar 4 onward. Exports from China in March had initially been expected to around 500,000mt. In South Korea, domestic oil firms were expected to need to reduce the operations in April because of a shortage of feedstocks. Meanwhile, part of Japanese refiners tried to buy the fuel back.

　In this situation, for April loading on an FOB South Korea, bid levels for 92RON gasoline reportedly at a premium of $5.85/bbl to the quotations and 91RON gasoline at a premium of $6.50/bbl to the quotation.

Naphtha: CSPC and Aster declare FM of petchem

　The second-half April open-spec naphtha prices on a CFR Japan basis up sharply. Market sentiment was strong with a sense of tight supply. In the naphtha market, market players paid attention to supplies with term contracts and the operational rates of refineries in Asia, and no fresh deal was heard in the spot market. One market participant said that in case of transporting cargoes loading from the Persian Gulf to Northeast Asian in the first-half April, it was likely that tankers would soon need to pass through the Strait of Hormuz. The market participant showed a view that it was not easy to fulfill the term contracts for cargoes for delivery in the first-half April. According to another market participant, it would take around 23 days for vessels to sail from the Persian Gulf to Japan.

　With regard to the operational rates of refineries, it was heard that some oil firms in Asia such as Japan, Singapore and Malaysia decreased the rates. In China, some refineries in East and South areas were heard to consider reducing the rates. In South Korea, it was pointed out that domestic refineries might need to adjust the rates in April or later.

　In this situation, according to a market source, for the second half-April delivery on a CFR Japan basis, possible deal levels were indicated at a premium of around $45/mt or higher to be assessed 45 days before and at a premium of $70/mt or lower to be assessed 30 days before.

In this situation, CNOOC and Shell Petrochemicals Company (CSPC) reportedly invoked force majeure of butadiene on Friday. It was heard that CSPC was considering cutting the operational rates of its naphtha cracker. Meanwhile, CNOOC's 440,000bbl-per-day Huizhou refinery was heard to continue operations as usual. However, the future operational status of the Huizhou refinery was not heard. In Singapore, Aster Chemicals and Energy declared force majeure on the day.

Middle distillates: Market sharply up while JPN refiner moving to buy back Mar cargo

　The differentials for MR-size cargoes of middle distillate on an FOB Northeast Asia basis skyrocketed. Refiners in Northeast Asia including South Korea were refraining from exporting fresh cargoes as it was not clear if they were able to secure crude oil. On the other hand, market players in Europe were keen on purchases of Asian cargoes as alternatives of those from the Middle East.

　In the Singapore paper swaps market, regrade, the price gap between jet fuel and gasoil, showed a wide premium. Although alternative gasoil cargoes were available in the US as well, market players were unable to buy alternative jet fuel in the US as the country was also in an import position. Market sources perceived that the market structure caused wider regrade amid strong buying interest for Asian jet fuel rather than gasoil.

Fuel oil: Refineries continue production cuts in NE Asia

The differential for MR-size cargoes of 0.5% sulfur fuel oil(380cst) on an South Korea basis was at a stable. Procurement of crude oil from the Middle East became difficult and refineries in Northeast Asia including South Korea decreased production volumes. For this reason, the number of spot cargoes was few in the market.

　The Chinese government required petroleum companies to stop exporting products on Wednesday. Supply of Bond-bunker was unclear going forward. Amid this, petroleum companies in Northeast Asia were expected to increase procurement of bunker oil that was running short in Singapore.

　At Fujairah, several suppliers declared force majeure in the bunker market. Bunker demand was expected to increase in Singapore and supply might tighten from the end of March to April. But market sources said that concerns about risks slightly eased and selling interest was seen in the spot market.