GASOLINE

The differentials for MR-size cargoes of gasoline on an FOB North Asia basis rose sharply with a rise in the differentials of gasoline on an FOB Singapore basis. Amid tight supply of gasoline on the back of declining exports from China, demand for cargoes loading from the end of October to early November was increasing from India or Indonesia. In India, lockdown for COVID-19 was being lifted and the rainy season was over, so that demand of gasoline was on the rise. On the other hand, operation rates at refineries were low, and oil companies were making moves to import cargoes. In Indonesia, lockdown was also being lifted and imports were increasing.

NAPHTHA

In the Northeast Asia spot markets, prices for first-half December delivery were strengthening. As bullish factors, market player cited that demand of naphtha as the feedstock of gasoline whose markets in Asia were firm was steady, and buying interests for December delivery were recovering ahead of restarts of naphtha crackers from turnaround and so on.

The differential for LR-size cargoes of naphtha on an FOB Middle East basis was keeping steady despite the strong sentiment. On the impact of a fire which had broken out at the 346,000 barrels-per-day Mina al-Ahmadi refinery owned by Kuwait Petroleum Corporation (KPC) on Oct 18, an expectation was heard that the naphtha supply was thinning actually. This could be a supportive factor for the FOB Middle East prices, and present spikes in the CFR Northeast Asia premiums would likely be a further bullish factor as well.

MIDDLE DISTILLATES

The differentials for MR-size cargoes of 0.001% sulfur gasoil on an FOB were unchanged. However, market sentiment stayed firm on tight supply/demand fundamentals. Each refiner in South Korea and Japan was gradually raising the operations at its refinery, but the number of spot cargoes was still few. In the meantime, CPC Co in Taiwan was making moves to buy two 250,000bbl cargoes loading on Nov 1-10 and Nov 1-15. Whereas the company was raising the operation rates of its refineries, demand of oil products at home was also increasing amid recovering economy. The company now seemed to be in a short position. However, as most spot cargoes from Japan and South Korea loading in the first half of November seemed to have been done, and there were almost no spot cargoes seen in the market. Sources speculated that cargoes loading in the second half of November could be traded at a discount of around 20cts/bbl to the quotations on an FOB basis, while those in the first half of the month were said to be traded in the positive territory to the quotations.

FUEL OIL

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was unchanged from a day earlier. In Taiwan, CPC Co sold 40,000mt of 0.5% sulfur fuel oil loading in November at a slight discount to Singapore quotations (0.5%S) on an FOB basis through a tender on Wednesday. The previous sale by the company had been at a slight premium to the same quotations. However, a Northeast Asian oil company noted that Singapore premium (0.5%S) hovered, and FOB Northeast Asia prices did not change so much. In Japan, additional buying interests for fuel oil to generate power were seen. As reported, Tohoku Electric Power earlier purchased 20,000-80,000mt low sulfur fuel oil arriving in October to March, but it was reported that the company pulled up its maximum volumes to 100,000mt.