Gasoline: GS Caltex sells early Apr cargo as Philippines spec

The differentials for MR-size cargoes of non-oxy gasoline on an FOB Northeast Asia basis went down on week. Supply from Europe and the US continued for Australia and New Zealand. Meanwhile, inquiries from Japan also retreated. Due to those factors, tight supply/demand fundamentals were sharply eased. According to market sources, Japanese market participants could domestically secure stocks of the fuel in April because Japanese refineries raised the operational rates after national oil reserves had been released. In the country, buying interest for the fuel by Japanese oil companies reportedly got weak.

In the Singapore futures market, Apr/May backwardation was currently in the range of $7-8/bbl, so that possible deal levels for the end of April cargoes were pointed out to be pushed down.

In South Korea, GS Caltex had conducted a sell tender for a 300,000bbl cargo loading on Apr 6-10 on Wednesday. According to a market source, this tender was awarded at a premium of $2.90/bbl to the quotations on an FOB basis by an Oil Major. This cargo was 90RON and 0.005%S as the Philippines spec.

Naphtha: Delivery for ME cargoes stops in NE Asia

The first-half May open-spec naphtha prices on a CFR Japan basis were unchanged. Considering sailing days, arrivals of cargoes from the Middle East to Northeast Asia were expected at the end of this week. The material was currently not supplied from ports in the Red Sea side or Fujairah, some market participants mentioned. In this situation, trading houses were trying to bring cargoes from other regions such as the US and Europe to Aisa. However, current tight supply was expected to continue.

In Northeast Asia, two naphtha crackers have either suspended operations or decided to do so due to a shortage of feedstock. In the spot market, LG Chem in South Korea bought an MR-size cargo of Russian naphtha for delivery in the second-half April at a premium of $90/mt to the quotations.

The first-half May heavy grade naphtha prices on a CFR Japan basis were steady. In the spot market, there were available cargoes for procurement from the US. However, part of end-users was inactive to buy the material since profits of producing aromatics such as paraxylene became worse with a sharp rise in naphtha prices.

Middle distillates: Jet fuel market slightly weak with increasing cargoes from other regions

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis went down in the second-half of the week. The Asian market was strong relative to other regions, leading to large inflows of non-regional cargoes such as those from India. Within the Asian region, some oil companies started new exports on the back of high crack margins. Supply/demand tightness appeared to be receding.

In South Korea, Hanwha TotalEnergies (HTC) sold one MR-size cargo for Apr 25-27 loading at a premium of around $20.00/bbl to the quotations on an FOB basis on Tuesday. The buyer was expected to divert the cargo to Australia.

The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis weakened. Despite tight market fundamentals, premiums for cargoes loading in late April were easily pressured in the steep backwardation structure in the paper swaps market. Currently, Australian players continued to show very strong buying interest. While gasoil consumption was high as fuel for heavy machinery for resource drilling, supply volumes in Australia were limited with only two refineries. Australian oil companies and traders in charge of supply to the domestic market maintained strong buying interest in individual negotiations.

Fuel oil: Sense of tight supply eases with receding buying interests

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was unchanged. Buying and Selling ideas were not heard in Northeast Asia including South Korea and the spot market was quiet. In Asia, a sense of tight supply eased and inventories were ample in Singapore. This was because demand receded due to surging prices at present. Buying interests in the bunker market, the main outlet of fuel oil, retreated. Shipping companies procured only immediate demand. Last-minute demand due to concerns over supply was not seen.