Gasoline: Non-oxy grade prices go up on strong demand for outside Asia

Prices went up on strong buying interest for non-oxy grade loading in May for the US market as some troubles at refineries were reported in the US West Coast. Demand was expected to increase as the summer driving season was approaching in the northern hemisphere. Gasoline prices in the US stood high and the arbitrage window for cargoes from Asia to the US West Coast fully opened. Thus, demand to Mexico was expected and buying interest for non-oxy grade in the US was getting strong. On the other hand, sales from China loading in May were poor and talks on spot cargoes lacked the momentum. In China, the government had yet to notify the second export quotas of oil products this year and refiners still had a hard time selling May cargoes.　　

Naphtha: Loose fundamentals extend

Open-spec naphtha prices on a CFR Japan basis were at a premium of $4.00-5.00/mt to Japan quotations to be assessed 30 days before delivery and at a premium of $3.00-4.00/mt to the quotations to be assessed 45 days before delivery. Loose supply/demand fundamentals capped the market prices.

Demand for naphtha for petrochemical products had hit the ceiling. In Japan, some petrochemical companies didn't raise the operation rates of naphtha crackers to adjust production volume of olefins due to unprofitable margins. A part of Japanese companies was heard to have surplus stocks of petrochemical products. In the country, the maintenance season for naphtha crackers had started and spot demand for naphtha didn't increase.

In South Korea, the average operation rates were at early 80's%. At present, domestic refiners seemed to be able to operate naphtha crackers at around 100%. However, the run rates of several naphtha crackers owned by petrochemical companies continued to be at 60's% or 70's%.

Middle distillates: Jet prices down on calm buying interest and NE Asia prices soften

Northeast Asia jet fuel prices went down. Purchases from buyers in Australia, Hong Kong, Japan and so on continued, but more buyers had already secured enough volumes for May. Meanwhile, several cargoes loading in May were being sold from South Korea and prices fell down. The spot market was weak. Profitability of cargoes for Europe and the U.S. was extremely low, and cargoes tend to stack in the Asian region.

In the 0.001% sulfur gasoil market, the spot market strengthened. Sales for May loading from China, one of the main exporting countries, were not starting in a full swing due to limited export quotas. On the demand side, there were procurements from Australia and Vietnam. The 0.05% sulfur gasoil market strengthen too. Buying interest from Vietnam, one of the main outlets from Northeast Asia, pushed up the prices. 　

Fuel oil: 0.5%S FO tumbles in FOB Korea market

The differential for MR-size cargoes of 0.5% sulfur fuel oil on an FOB South Korea basis was broadening due to feeble demand. More players became reluctant to purchase very low sulfur fuel oil (VLSFO), and also 0.5%S fuel oil that is used as a raw material of VLSFO. "There were few players who sought VLSFO in South Korea's bunker fuel market," said a person at a South Korean oil firm. State-run Kuwait Petroleum Company (KPC) was likely to ship more 0.5% sulfur fuel oil cargoes from May as KPC was increasing operation rates of its 615,000 barrel-per-day Al-Zour refinery.