14 May, 2018
Formosa Petrochemicals Co (FPCC) in Taiwan sold 250,000bbl of 93RON gasoline (0.005%S) loading during Jun 22-26 through a tender at a premium of lower than 40cts/bbl to Singapore quotations on an FOB basis. A refiner in Dalian, China was likely to supply all volumes to term lifters.
Middle East oil companies launched term talks one after another. Kuwait Petroleum Co (KPC) planned to start talks for an August-July 2019 period from early June in London. Meanwhile, Abu Dhabi National Oil Company (ADNOC) of the United Arab Emirates (UAE) continued talks for a July-June 2019 period. There has been little progress in the talks since the company repeated an offer at a premium in the $20’s/mt to Middle East quotations.
In China, West Pacific Petroleum Co Dalian (WEPEC) sold an MR-size cargo of 0.005% sulfur gasoil loading during Jun 26-28 from Dalian at a discount of 60cts/bbl to Singapore quotations on an FOB basis. China National Offshore Oil Co (CNOOC) was also making moves to sell an MR-size cargo of 0.005% sulfur gasoil loading during Jun 2-3.
The differential for MR-size cargoes of 3.5% sulfur fuel oil on an FOB South Korea basis went up with a rise in the differential on an FOB Singapore basis. In Singapore, due to a lack of on-spec bunker fuel, the market of 3.5% sulfur fuel oil was strengthening. Meanwhile, in the Middle East, procurement of high sulfur fuel oil was likely to be increasing toward the summer demand season. In Pakistan, demand of fuel oil for power generation was said to be increasing as operation of liquified natural gas power plants was behind schedule.