Gasoline: Shift from purely bullish tone, selling interest from South Korea

　 Differentials for MR-size gasoline cargoes loading in Northeast Asia were unchanged. Although inquiries from Southeast Asia continued, selling interest also started to emerge, indicating a shift in market sentiment from a purely bullish tone. In the spot market, South Korean GS Caltex conducted a sell tender for an MR-size cargo for loading on Jul 27-31, which closed on the 19th. SK Energy was also reportedly actively promoting sales in the spot market.

Naphtha: 1H Aug CFR Japan dealt at a $5 discount

　 Differentials for 1H Aug CFR Japan open-spec naphtha remained deep in discount territory. Oversupply persisted, keeping market sentiment weak. Japan's Asahi Kasei Mitsubishi Chemical Ethylene Corp (AMEC) reportedly purchased 25,000mt of open-spec for delivery in 1H Aug on a CFR basis at a discount of around $5.00/mt to Japan quotations (2H Jun) via a tender on the 15th. The oversupply was attributed to stable refinery operations and gradually increasing supply of Middle East cargoes. Market sources in China pointed out that domestic naphtha supply/demand fundamentals are expected to tighten due to lower refinery run rates, which could increase the incentive to import naphtha. This expectation pushed the naphtha market up in late this week.

Middle Distillates: SK to sell 1.35mil bbl, GS sells 750kb

　 Differentials for MR-size jet fuel cargoes loading in Northeast Asia fell sharply, entering discount territory. Supply, particularly from South Korea, was abundant. SK Energy and South Korean GS Caltex were actively selling. SK Energy offered a total of 1.35mil bbl for loading in mid-Jul to early Aug. South Korean GS Caltex also conducted a sell tender for 750,000bbl or two cargoes of 300,000bbl each and sold 750,000bbl. Market sources also reported that the Chinese government would enter discussions to halt oil product export restrictions, raising awareness of the possibility of further supply increases. Spot differentials for MR-size 0.001% sulfur gasoil cargoes loading in Northeast Asia also softened. While buying interest remained weak, selling was active, leading to slack supply/demand fundamentals. One trader sold one MR-size cargo for loading on Jul 21-25 from Daesan on an FOB basis at a discount of around 60cts/bbl to Singapore quotations.

Fuel Oil: CPC continues to sell low sulfur products

　 Differentials for MR-size VLSFO (0.5% sulfur fuel oil) cargoes loading in South Korea were unchanged. However, downward pressure on future market prices was emerging. This was on the back of continued declines in crude oil prices, fueled by rising expectations for an agreement to end hostilities between the US and Iran. If tensions in the Middle East eased, fuel oil supply was expected to increase. In Northeast Asia, CPC Co in Taiwan continued to sell low sulfur fuel oil. The company on the 16th closed a sell tender for 40,000mt of 0.5% sulfur fuel oil for loading on Jul 2-6. The validity of the bids was until the 18th. The Residue Fluid Catalytic Cracking (RFCC) unit (80,000b/d) at Daesan refinery (350,000b/d), which had been shut down since early Apr due to a fire accident, was aiming for a restart in 2H Jul.