GASOLINE

The differentials for MR-size cargoes of gasoline on an FOB Northeast Asia basis were weakened as buying interests retreated. As the gasoline price in Singapore had turned into downward trend, traders were inactive to procure cargoes. Also a bearish factor for the market was that the backwardation structure was getting sharp in the paper swaps market. That was also depriving market players from buying cargoes. The timing spread between December and January was $1.70/bbl in favor of December.

In the meantime, on Tuesday, Formosa Petrochemicals Co (FPCC) in Taiwan sold two 250,000bbl cargoes of 93RON gasoline loading o Dec 19-23 and Dec 24-28 via a tender at a premium of $1.80/bbl to Singapore quotations on an FOB basis.

NAPHTHA

The differential for LR-size cargoes of naphtha on an FOB Middle East basis strengthened. Values for cargoes loading from the Middle East on an FOB basis became higher due to their scarcity. As reported, Bahrain Petroleum Co (BAPCO) earlier sold naphtha with a paraffine content at more than 80% at a premium in the high $40's/mt to Middle East quotations. There was information that the actual deal price was at a premium of $50/mt to the quotations.

In the meantime, the arbitrage window to Asia was narrowing. In October, the inflows from Europe were only 980,000mt. The total supply volumes to Asia in November were expected to decline to 6.0-6.5 million (mil) mt from the previous month including 3.0 mil mt from the Middle East.

MIDDLE DISTILLATES

The differentials for MR-size cargoes of jet fuel on an FOB Northeast Asia basis strengthened on tight supply. As the kerosene demand season was approaching in Northeast Asia, refiners in the region were focusing on productions of kerosene, so that the number of spot cargoes was limited. Meanwhile, imports from Japan were emerging. On Wednesday, GS Caltex in South Korea reportedly sold two MR-size cargoes loading on Dec 8-12 and Dec 14-18 at a premium of around 90cts/bbl to the quotations on an FOB basis. It was reported that one of the cargoes was awarded to a Japanese refinery.

FUEL OIL

The differential for MR-size cargoes of 0.3% sulfur fuel oil on an FOB South Korea basis gained. Response to surges in demand of low sulfur fuel oil for power generation in Northeast Asia recently. A market viewer in Asia reported that the differential for MR-size cargoes of 0.3% sulfur fuel oil on an FOB South Korea basis was spiking to a premium in the range of $120.00-130.00/mt to Singapore quotations, considering the price gap between 0.3% sulfur fuel oil and 0.5% sulfur fuel oil. On the other hand, the market viewer saw those procurements of fuel oil for power generations in November and December completed a cycle and paused in Japan.