Gasoline: Oxy market weakens on views of increased Chinese exports

　 The differentials for MR-size oxy gasoline loading in Northeast Asia retreated despite a temporary rise. Downward pressure was added to the market on perceptions of increased sales volumes in the region. According to a market source, China's July-loading gasoline exports could exceed 400,000mt. According to another market source, there were reports that Chinese companies were looking for tankers to export gasoline. According to the country's statistics, following the deterioration of the situation in Iran, exports in March stood at approximately 300,000mt, in April at approximately 20,000mt, and in May at approximately 30,000mt.

Naphtha: Market gains, with reduced ex-region cargoes and resurgent geopolitical risks

　 The differentials for open-spec naphtha (OSN) on a CFR Japan basis for H2 August delivery went up. Limited cargoes from regions outside Asia for August arrival had contributed to rising market prices in Asia. The resurgence of geopolitical risks was also a factor. With the deteriorating situation in Iran, it was heard that companies able to lift cargoes from the Persian Gulf were limited, which would also limit the increase in supply from the Middle East.

　 Market attention was focused on the movements of Chinese players. The prevailing view was that companies able to use ethane were increasing their ethane cracking volumes as much as possible. Meanwhile, in China, export restrictions for July loading were reportedly eased, increasing the likelihood of higher gasoline exports. One Chinese oil firm said, "If gasoline exports increase, refineries will raise their gasoline yield. We want to ascertain the actual export situation." In the market, some traders predicted that an increase in gasoline exports would reduce naphtha supply for petrochemicals, leading to higher naphtha imports.

Middle distillates: Purchases of 1H Aug cargoes push up market

　 The differentials for MR-size cargoes of jet fuel loading in Northeast Asia were strengthened.

With August-loading cargoes from Northeast Asia being limited, buying interest gathered for limited sales. Formosa Petrochemical Corp (FPCC) sold 300,000bbl loading on Aug 11-15 via a tender at a premium of $1.10/bbl to the quotations on an FOB basis.

　 The differentials for MR-size 0.001% sulfur gasoil loading in Northeast Asia was pushed up by strong buying interest for cargoes loading in the first half of August. From Japan, at least two MR-size cargoes of 0.001% sulfur gasoil for the first half August loading had reportedly been sold. The three refiners, ENEOS, Idemitsu Kosan, and Cosmo Oil, had been actively exporting gasoil from July loading.

　 The expanding arbitrage from Asia to Europe was a bullish factor. In Europe, market levels were firm due to reduced supply associated with lower refinery run rates, affected by a heatwave. Furthermore, a sense of tightness had intensified due to Russia's export ban. The Russian government issued a gasoil export ban on last Wednesday, scheduled to last until Jul 31. In Russia, petroleum product supply had decreased due to successive attacks on refineries in Ukraine, and this measure aimed to ensure stable domestic supply. Countries like Turkey, which had been purchasing Russian products, might increase their purchases of alternative products, which had pushed up Northeast Asian market levels.

Fuel oil: Tight supply/demand eases with increase in supply

　 The differentials for MR-size 0.5% sulfur fuel oil loading in South Korea unchanged. But supply increased in Singapore and it weighed down the market. In Singapore, 1.2-1.3mil mt of low sulfur fuel oil was expected to arrive from Europe in July. Imports volume from Europe was 600,000mt-700,000mil mt in June. For this reason, tight supply/demand was easing.

Troubles of residue fluid catalytic cracker (RFCC) reportedly occurred at the 650,000b/d Dangote refinery in Nigeria. The refiner conducted a buy tender of crude oil loading in August. But the volume was limited to 1.5mil bbl.