Asian gasoline draws support from outflows to Middle East
Robust appetite from the Middle East for gasoline and dry re-supply from Europe has prompted the Persian Gulf to draw barrels from Asia, underpinning the market in Singapore, market sources said late Tuesday.
Up to 300,000 mt of August-loading gasoline was slated to ship from Taiwan and Singapore to the Persian Gulf, according to trade sources and shipping fixtures.
The cargoes were expected to make up for the limited availability of gasoline cargoes in the Persian Gulf, and ease the length of supply in the Far East, market sources said.
“A lot of import requirements are coming out — I see Saudi, Kuwait, Iraq has been buying. Nothing much is coming from [Europe] either, in general the PG market is short,” a trader said.
Some of the barrels were expected to be brought on to Africa.
The outflow of supply to the Middle East cushioned the Asian market. The FOB Singapore 92 RON gasoline crack held steady despite losses in the RBOB crack. The RBOB crack at the Singapore 4.30 pm close [0830 GMT] Tuesday fell from a recent high of $16.31/b on July 20 to $13.18/b on August 7, but the 92 RON crack held steady at $8.17/b on July 30 and $8.16/b on August 7, S&P Global Platts data showed.
According to shipping sources, Total and BP had fixed Long Range 2 tankers from their own programs, for Taiwan to Singapore voyages with options for discharge in the Persian Gulf. While from Singapore, Vitol and Trafigura had chartered Long Range 1 tankers for voyages to the Persian Gulf. (See table below for fixture details.)
“Some of the [Far East gasoline barrels] were sold into Africa as well,” a trader said.
Platts earlier reported outflows of up to 210,000 mt of July-loading Asian gasoline to West Coast Mexico, and another 70,000 mt of August-loading gasoline were slated to move on MR tankers chartered by Mexico’s PMI.
“The market is pretty backwardated [in Asia] so you would want to get rid of the barrels as quickly as possible,” a trader said. On Tuesday, both the prompt 92 RON balance August/September swap and the front-month September/October swap spread were assessed at plus 57 cents/b, Platts data showed.
Market participants and shipping data showed gasoline exports from Taiwan to the PG had resumed after a hiatus in June and July.
“This year it is common for gasoline to move from Taiwan to PG, there was 200,000 mt in February, 120,000 mt in March, 120,000 mt in April, 85,000 mt in May, none in June and July, and 120,000 mt in August,” a trader with a North Asian refiner said.
“Possibly the Middle East area demanded non-oxy gasoline so they took some barrels from Taiwan instead of from China,” the source added.
Taiwan’s Formosa typically exports 93 RON gasoline from Mailiao, while Taiwan’s CPC typically exports 92 RON gasoline.