Gasoline: Dec sales emerge from Japan, Nov export from China expected sharply to increase

　 FOB Northeast Asia non-oxy grade prices rose. Negotiations shifted to first-half December (1H Dec) loading cargoes. The market, which had softened for late November loading on the back of backwardation in paper swaps, rebounded. As supply of non-oxy grade for December loading from Northeast Asia is not large at present, buying interest is likely to concentrate on limited cargoes.

　 In the spot market, some selling interests for 92RON gasoline for December loading in Japan emerged. Among these, a first-half December (1H Dec) loading cargo was reportedly traded at a discount in the mid-$1 /bbl range to Singapore 92RON quotations on an FOB basis. In negotiations for oxy grade, sales of November-loading cargoes from China increased, leading to slackening supply/demand fundamentals. According to some market sources, 0.9-1.1 mil mt could be exported in November. In China, export quotas were announced twice in October. Market sources indicated that China might be increasing gasoline sales to use up its 2026 export quotas, as gasoline is considered to have more export surplus than other products due to a decline in domestic demand.

Naphtha: QE and KPC sell Nov-loading cargo on FOB basis

　 The spot differential for second-half December (2H Dec) arrival open-spec naphtha (OSN) in Japan remained flat. However, it was pointed out that the market was nearing its peak due to declining petrochemical demand and soft gasoline prices. The recent surge in naphtha prices has squeezed ethylene margins. Furthermore, benzene prices, which had been relatively firm among aromatics, also began to lose momentum. Against this backdrop, naphtha cracker operating rates remained adjusted, resulting in weak demand.

　 Additionally, the sharp fall in gasoline prices is seen as a bearish factor. Demand for naphtha for gasoline blending retreated, and a sense of ample naphtha supply might strengthen towards forward months.

　 In negotiations for Middle East loading cargoes, two FOB-based sales were confirmed. QatarEnergy (QE) sold 35,000mt of full-range naphtha and 55,000mt of light naphtha for November 3-5 loading at a discount in the mid-$10/mt range to Middle East quotations on an FOB basis. Meanwhile, Kuwait Petroleum Corp (KPC) sold 50,000mt of full-range naphtha for November 15-25 loading at a premium in the mid-$10/mt range to Middle East quotations on an FOB basis. The buyer was reportedly HPCL-Mittal Energy (HMEL) in India.

Middle distillates: KOR company strikes kerosene supply short term with JPN refiner

　 Spot differentials for Northeast Asia-loading MR-size jet fuel remained flat. However, the sentiment was weak. China's November export volume is expected to reach up to around 1.6 million mt. Inventories in South Korea and Singapore were filled by China-loading selling interest, and inquiries from traders remained sparse.

　 Spot differentials for Northeast Asia-loading MR-size 0.001% sulfur gasoil rose. This was on the back of buying interest for first-half December (1H Dec) loading cargoes. ENEOS showed strong selling interest in the spot market. The company sold one MR-size cargo for late November loading from Mizushima and Kashima, two ports, on Oct 30. The price was reportedly at a discount of less than $5/bbl to Singapore quotations on an FOB basis. Market sources also indicated that ENEOS was considering selling another MR-size cargo for November loading.

　 In the Singapore paper swaps market, the regrade (spread between jet fuel and gasoil) for the November contract turned negative. This was due to ample supply from China and high freight rates making out-of-region sales uneconomical, leading to a relatively soft jet fuel market.

　 Spot differentials for South Korea-loading SR-size kerosene retreated. Trading for December-loading cargoes began. Downward pressure was placed on the market due to expectations of a slight increase in spot sales volumes for December loading compared to November loading. The South Korean government has set the export volume cap for each month in 2027 at 100% compared to the same month in 2026. Some oil companies had a certain level of export performance in December 2026, leading to strengthening selling interest.

　 In term negotiations, it was revealed that a South Korean company signed a contract with a Japanese refiner in October to supply one MR-size cargo per month. The contract period was from December 2026 to January 2027. The price was at a premium of around $6.00/bbl to Singapore quotations on an FOB basis.

Fuel oil: Selling hastened in the Singapore market due to concerns over increasing supply

　 Spot differentials for South Korea-loading MR-size 0.5% sulfur fuel oil remained flat. Selling interest from traders was strengthening in Southeast Asia, centered on the Singapore market. Concerns about the Middle East situation eased following the US midterm elections, and the possibility of increased supply of Middle Eastern heavy fuel oil in the future was expected. Suppliers holding cargoes seemed to be rushing to sell.

　 On the other hand, no spot selling interest was observed in Northeast Asia, including South Korea. Although some South Korean oil companies had export availability for December loading, they were hesitant to sell due to aversion to the current soft market prices.