This week we observe a notable divergence between the MR and SR segments across North Asia. While MR freight remains softening across most benchmark routes, the SR/coastal segment in Japan–Korea has been comparatively active.
Commentary
This week we observe a notable divergence between the MR and SR segments across North Asia. While MR freight remains softening across most benchmark routes, the SR/coastal segment in Japan–Korea has been comparatively active.
OVERVIEW
This week we observe a notable divergence between the MR and SR segments across North Asia. While MR freight remains softening across most benchmark routes, the SR/coastal segment in Japan–Korea has been comparatively active, with multiple stems moving kerosene, gasoline, and light cycle oil between refineries.
The Korea – Japan coastal activities appear to be driven by post-winter kerosene inventory adjustments, gasoline blending requirements, and short-haul arbitrage balancing between Japan and Korea.
Zooming in to Singapore as a major trade hub in Asia, physical indicator still points to ample product availability in the hub. Enterprise Singapore data shows Singapore light distillate stocks rising to a record 19.474 mil bbl in the week to Feb 18th. We saw Sin-HK assessment dipped to -25% for 7-days change propelled by more gasoline supplies as a result of higher utilization rates at refineries, and another factor is Lunar Year demand has also not picked up in China.
For the Singapore gasoline, the market speculates contango in play, and traders prefer to buy later contracts. Lower queries and stock buildup causing lackluster cargo demands in the Straits, especially with naphtha and gasoline. Marketwide Research summarizes the key player for Southeast Asia:
For the macro backdrop, the tension between US-Iran created a “wait and see” approach and the US also place 10 to 15 days ultimatum to Tehran to agree to deal or “bad thing” happens. Market has priced in these events with the oil price increase marginally but not at a dramatic level.
As icing on the topping, on Sunday 22nd February, Trump announced he will increase his new global tariffs to 15%, as he continued to replace global tariffs scrapped by the Supreme Court.
The market would need time to absorb the headwind as it is not clear when the 10-15% under Section 122 would take place. We expect this would impact the trade flows such as refined product demand patterns.
News & Commentaries
This week we observe a notable divergence between the MR and SR segments across North Asia. While MR freight remains softening across most benchmark routes, the SR/coastal segment in Japan–Korea has been comparatively active.
This week we observe a notable divergence between the MR and SR segments across North Asia.
While MR freight remains softening across most benchmark routes, the SR/coastal segment in Japan–Korea has been comparatively active, with multiple stems moving kerosene, gasoline, and light cycle oil between refineries.
(Click here to read more)
The Korea – Japan coastal activities appear to be driven by post-winter kerosene inventory adjustments, gasoline blending requirements, and short-haul arbitrage balancing between Japan and Korea.
Zooming in to Singapore as a major trade hub in Asia, physical indicator still points to ample product availability in the hub. Enterprise Singapore data shows Singapore light distillate stocks rising to a record 19.474 mil bbl in the week to Feb 18th. We saw Sin-HK assessment dipped to -25% for 7-days change propelled by more gasoline supplies as a result of higher utilization rates at refineries, and another factor is Lunar Year demand has also not picked up in China.
(Click here to read more)
For the Singapore gasoline, the market speculates contango in play, and traders prefer to buy later contracts. Lower queries and stock buildup causing lackluster cargo demands in the Straits, especially with naphtha and gasoline. Marketwide Research summarizes the key player for Southeast Asia:
For the macro backdrop, the tension between US-Iran created a “wait and see” approach and the US also place 10 to 15 days ultimatum to Tehran to agree to deal or “bad thing” happens.
Market has priced in these events with the oil price increase marginally but not at a dramatic level.
(Click here to read more)
As icing on the topping, on Sunday 22nd February, Trump announced he will increase his new global tariffs to 15%, as he continued to replace global tariffs scrapped by the Supreme Court.
The market would need time to absorb the headwind as it is not clear when the 10-15% under Section 122 would take place. We expect this would impact the trade flows such as refined product demand patterns.