GASOLINE

The differential for MR-size cargoes of 92RON gasoline on an FOB Northeast Asia basis was unchanged. However, market sentiment was firm amid active buying of traders. As vaccinations for COVID-19 were prevailing, demand was expected to increase in line with economic recovery, so that traders were active to procure cargoes. This week, it was revealed that China National Offshore Oil Co sold an MR-size cargo of 92RON gasoline with an oxygen content up to 0.5% loading on Oct 8-9. The price was reportedly at a premium of $1.70/bbl to Singapore quotations on an FOB basis. In the meantime, it was possible that the 130,000barrels-per-day Dung Quat refinery in Vietnam could be shut down as demand of oil products in the country was sharply declining amid the outbreak of COVID-19.

NAPHTHA

In the Northeast Asia market, a market player viewed that although CFR Northeast Asia prices were slightly lowering, FOB Middle East values would be steady. On the back of that, the player added that the annual supply volumes to Asia were 50 million(mil) mt on a CFR basis and 25 mil mt on an FOB basis, so that premiums would be added on FOB cargoes loading from the Middle East rather than CFR cargoes. Meanwhile, Kuwait Petroleum Corporation (KPC) was going to start discussions on term contracts starting from December in October. Judging from prices throughout a year, a source related with the Middle East market saw that the term discussion levels would be a little lower than a premium of $25-28/mt to Middle East quotations which was the price for the term contract starting from October to December conducted by Qatar Petroleum (QP).

In Japan, Kashima refinery of ENEOS and Chiba refinery of Idemitsu had shut down their paraxylene units due to fires. However, supplies had yet to be disrupted. A market participant in Japan pointed out that when the shutdown for PX units would be prolonged, demand of PX and mixed xylene (MX) as the feedstock would retreat, and that would weigh on markets of gasoline and naphtha.

MIDDLE DISTILLATES

The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB Northeast Asia basis were gained on an expectation that slack supply/demand fundamentals would be eased. As some market players speculated that lockdown for COVID-19 would be lifted in a wide range across the globe, a part of traders was said to be actively making moves to buy cargoes from Northeast Asia. On the other hand, supply in Asia was tightening due to thin supply from China and some turnaround of refineries in Northeast Asia. Therefore, prices for cargoes loading in October were going up.

FUEL OIL

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis weakened　from a day earlier as supply increased. South Korean oil company viewed that the deal level for cargoes loading from South Korea to Singapore was at a discount of around $25.00/mt to Singapore quotations (0.5%S). As a bearish factor, it was cited that supply surplus of VLSFO for bunker was said to be traded as 0.5% sulfur fuel oil cargoes as feedstock at cheap prices. Further, the oil company saw that present FOB South Korea prices were different from the market values for 0.5% sulfur fuel oil on an FOB Singapore basis.