GASOLINE

The differential for MR-size cargoes of 92RON gasoline on an FOB South Korea basis weakened. Sluggish demand in Southeast Asia pushed down the differential. In the region, demand remained weak as the new variant of COVID-19 was spreading out. Traders were inactive to secure cargoes. Higher freight rates were also a downward pressure on prices.

NAPHTHA

The differential for LR-size cargoes of naphtha on an FOB Middle East basis weakened on the mirror of soft sentiment in CFR Northeast Asia prices. On Jan 14, Kuwait Petroleum Corporation (KPC) announced that a fire broke out at its 466,000 barrel per day Mina Al Ahmadi refinery, but the company noted that there were no impacts on shipments of oil products after that. The company was planning discussions for the term contract starting from April in February. Meanwhile, Abu Dhabi National Oil Company (ADNOC) was drone-attacked near its oil storage units and explosions occurred, there was a concern that supply from its refineries would possibly be disrupted.

MIDDLE DISTILLATES

The differentials for MR-size cargoes of 0.05% sulfur gasoil on an FOB Northeast Asia basis softened. The market was pushed down as the paper swaps market was in backwardation. In the Singapore paper swaps market, the timing spread between February and March was $1.70/bbl in favor of February, so that buyers were lowering their buying ideas for the second half February loading cargoes. Also, the bearish factor for the market was that demand for vessels off the coast of Taiwan remained sluggish ahead of the Luna New Year holidays.

FUEL OIL

The differential for SR-size cargoes of 0.3% sulfur fuel oil on an FOB South Korea basis gained. Concerning the purchase of low sulfur fuel oil for heating by Korea District Heating Corporation (KDHC) from Shell in Singapore, it was informed that KDHC actually procured two cargoes of 0.3% sulfur fuel oil arriving in Jan-Feb at a premium of a little less than $40/mt to Singapore quotations (0.5%S) at the end of December. The price was seen to be equal to a premium of over $200.00/mt to Singapore quotations (180cst). Further, an Asian oil company said that the price gap between low/high sulfur fuel oil was widening in Singapore, the trading hub market of Asia. The gap was $180-190/mt for January, $160/mt for February, and $140/mt for March. The oil company viewed that the differential for SR-size cargoes of 0.3% sulfur fuel oil on an FOB South Korea basis was strengthening to a premium in the range of $205.00-215.00/mt to Singapore quotations(180cst).