RIM Intelligence Co.

RIM PRODUCTS INTELLIGENCE DAILY

No.4409 October 19, 2004

--Tokyo, 20:00 JST 19Oct2004

JAPAN DOMESTIC WATERBORNE SPOT MARKET (Barges FOB Refinery/Primary Storage, in Yen/kl)

Tokyo Bay (Keihin/Chiba) West Japan (Hanshin/Setouchi)

Fixed Price Floating Fixed Price Floating

Gasoline* 92,500-93,500 -200/0 92,300-92,800 -200/0

Kerosene 42,500-43,500 0/+300 41,300-41,700 0/+400

Gasoil-0.005%S 40,000-40,500 0/+300 +40,200-41,000 0/+300

AFO-1.0%S +34,000-34,400+ 0/+200 +34,300-34,700+ 0/+200

AFO-0.1%S 36,500-36,800 0/+200 36,300-36,700 0/+200

LSCFO-0.3%S 33,500-34,000 0/+100 33,000-33,500 0/+100

HSCFO-3.0%S 27,200-27,900 -100/+200 27,100-27,900 -100/+200

--MOF CIF Japan Crude: Aug 1-31 Yen 26,109/kl(HS-code basis, provisional)

Sep 1-10 Yen 27,542/kl, Sep 11-20 Yen 28,610/kl, Sep 1-20 Yen 28,087/kl

*including Yen 53,800 tax

Floating price assessments in premiums or discounts against RIM monthly average

JAPAN PRODUCT PAPER SWAP ASSESSMENTS (FOB Tokyo Bay in Yen/kl)

Nov Dec Jan

Gasoline* 95,600-96,000 96,200-96,500 -96,900-97,300-

Kerosene -46,400-46,600- -48,000-48,300- -48,100-48,400-

Gasoil +43,700-44,000+ -42,700-43,000- -43,100-43,400-

AFO-1.0%S +35,500-35,900+ +35,600-36,000+ +35,700-36,100+

AFO-0.1%S +36,900-37,400+ +37,000-37,500+ +37,100-37,500+

LSCFO +35,100-35,500+ +35,600-36,000+ +35,500-35,800+

HSCFO +26,300-26,700+ +26,800-27,200+ +26,700-27,000+

*including Yen 53,800 tax

TOCOM ENERGY FUTURES (FOB Tokyo Bay Refinery/Primary Storage in Yen/kl)

Open High Low Settle Change Volume

Gasoline

Nov 41,050 42,110 40,950 42,000 0 375

Dec 41,610 42,730 41,580 42,610 0 1,030

Jan 42,350 43,470 42,340 43,310 -310 2,198

Feb 43,080 44,230 43,080 43,910 -520 9,577

Mar 43,940 45,090 43,940 44,470 -820 24,281

Apr 45,050 46,270 45,050 45,520 -880 73,748

Total 111,209

Kerosene

Nov 45,950 46,650 45,890 46,550 -260 312

Dec 47,550 48,350 47,550 48,310 -440 630

Jan 47,510 48,460 47,510 48,430 -380 1,885

Feb 46,700 47,850 46,690 47,490 -510 4,129

Mar 44,880 45,890 44,880 45,650 -580 16,536

Apr 42,450 43,460 42,450 43,400 -400 39,580

Total 63,072

Gasoil

Nov 42,950 43,830 42,950 43,830 +490 6

Dec 42,730 42,990 42,730 42,870 -700 11

Jan 43,030 43,270 43,030 43,270 -640 19

Feb 42,500 42,800 42,500 42,740 -660 56

Mar 42,420 42,770 42,410 42,660 -650 202

Apr 43,110 43,530 43,050 43,520 -430 1,022

Total 1,316

In contracts of 100 kiloliters

Open interest(10/19): Gasoline116,028, Kerosene 95,277, Gasoil 1,740

TOCOM TAPIX Crude Index (standard) $/bbl 44.38(-0.66), Yen/kl 30,820(-420)

CFR JAPAN MR CARGOES (Naphtha and HSFO in $/mt, Others in $/bbl)

-Yen/kl- -Premium-

Naphtha - 455.75-457.50 - 35,275 -3.50/-2.25

Dec 1st-half - 453.50-454.00 -

Dec 2nd-half - 455.75-456.25 -

Jan 1st-half - 457.00-457.50 -

Jet/Kerosene - 63.05- 63.25 - 43,860 2.00/ 2.20

Gasoil 0.005%S - 60.75- 61.25 - 42,637 3.90/ 4.40

LSWR 0.2%S - 44.55- 44.65 - 30,977 4.50/ 4.80*

FO 180cst 3.5%S - 225.50-226.50 - 23,957

--Exchange rate (TTS Yen/$ as of Oct 19) 110.42

*Premium to Pertamina Formula

FOB SINGAPORE CARGOES (FO in $/mt, Others in $/bbl)

-Physical- -Premium-

Mogas 97RON - 55.30- 55.40 - 7.90/ 8.00*

95RON - 53.50- 53.60 - 6.10/ 6.20*

92RON - 52.40- 52.50 - 5.00/ 5.10*

Naphtha - 47.15- 47.25 - -0.25/-0.15

Jet/Kerosene - 60.55- 60.65 - -0.50/-0.40

Gasoil 0.05%S - 57.15- 57.25 - 0.30/ 0.40

Gasoil 0.5%S - 56.00- 56.10 - -0.85/-0.75

FO 180cst 2.0%S - 212.00-213.00 -

FO 180cst 3.5%S - 206.50-207.50 - -0.50/ 0.50

FO 380cst 3.5%S - 197.00-198.00 -

*Premium to Naphtha

FOB INDONESIA MIXED/CRACKED LSWR CARGOES

-Physical- -Premium-

LSWR Mxd/Crkd 0.2%S - 40.95-41.05 - 0.90/ 1.20*

Expected PPF - 39.90-40.00 -

*Premium to Pertamina Price Formula

REMARK: As of Feb 03, 2003, "LSWR-CRKD 0.2%S" price assessment under

the heading of "FOB SINGAPORE CARGOES" has been renamed as "LSWR Mxd/Crkd 0.2%S"

and moved to a new section of the Products Report under the heading of

"FOB INDONESIA MIXED/CRACKED LSWR CARGOES"

SINGAPORE PAPER SWAPS (FO in $/mt, Others in $/bbl)

Nov Dec Jan

Naphtha - 47.35- 47.45 - - 47.40- 47.50 - - 47.15- 47.25 -

Jet - 61.00- 61.10 - - 61.55- 61.65 - - 61.30- 61.40 -

Regrade - 4.15/ 4.25 - - 4.20/ 4.30 - - 4.25/ 4.35 -

Gasoil 0.5%S - 56.80- 56.90 - - 57.30- 57.40 - - 57.00- 57.10 -

FO 180cst 3.5%S - 206.75-207.25 - - 206.50-207.00 - - 206.25-206.75 -

FOB SOUTH KOREA CARGOES (FO in $/mt, Others in $/bbl)

MR Cargoes -Premium-

Jet/Kerosene - 62.20- 62.30 - 1.15/ 1.25

Gasoil 0.05%S - 57.85- 57.95 - 1.00/ 1.10

Gasoil 0.5%S - 56.15- 56.25 - -0.70/ -0.60

FO 180cst 3.5%S - 214.50- 215.50 - 7.50/ 8.50

LSFO 0.3%S + 259.50- 264.50 + 52.50/ 57.50

MSFO 1.5%S - 219.50- 220.50 - 12.50/ 13.50

SR Cargoes -Premium- CFR Japan Parity#

Mogas 91RON - 55.90- 56.40 - 8.50/ 9.00* 97,058

Kerosene - 63.55- 63.75 - 2.50/ 2.70 47,645

Gasoil 0.005%S - 59.85- 60.35 - 3.00/ 3.50 45,872

AFO - 57.35- 57.55 - 0.50/ 0.70** 40,735

LSAFO - 57.85- 58.05 - 1.00/ 1.20** 41,082

LSFO 0.3%S + 261.50- 266.50 + 54.50/ 59.50

MSFO 1.5%S - 221.50- 222.50 - 14.50/ 15.50

*Premium to FOB Singapore naphtha

**Premium to FOB Singapore gasoil 0.5%S

# in Yen/kl, Basis Nagoya

SR Clean Tanker Freight Rates($/bbl)

Korea to Tomakomai 1.70-1.90 Korea to Keihin 1.40-1.60

Korea to Nagoya 1.10-1.30 Korea to Kanmon 0.90-1.10

FOB TAIWAN CARGOES (in $/bbl)

MR Cargoes -Premium-

Gasoil 0.05%S - 57.60- 57.70 - 0.75/ 0.85

Gasoil 0.5%S - 56.65- 56.75 - -0.20/ -0.10

SR Cargoes -Premium-

Kerosene - 62.75- 62.85 - 1.70/ 1.80

Gasoil 0.05%S - 57.95- 58.05 - 1.10/ 1.20

FOB ARABIAN GULF CARGOES (Naphtha and HSFO in $/mt, Others in $/bbl)

-Premium-

Naphtha - 411.25- 412.25 - 11.00/ 13.00

Kerosene - 58.60- 58.70 - 0.95/ 1.05

Gasoil 0.5%S - 54.05- 54.15 - 1.20/ 1.30

FO 180cst 3.5%S - 190.50- 191.50 -

ASIA BUNKER PRICES ($/mt on a delivered basis)

180cst 280cst 380cst MDO

Japan*

Tokyo Bay* 241.00-242.00 239.00-240.00 237.00-238.00 400.00-410.00

West Japan* 241.00-242.00 239.00-240.00 237.00-238.00 400.00-410.00

Ise Bay* 248.00-249.00 246.00-247.00 244.00-245.00 420.00-430.00

--#Contract-SEP 216.90 214.90 212.90 372.00

S. Korea* -250.00-252.00- -241.00-243.00- -230.00-232.00- 440.00-445.00

Taiwan* 247.00-255.00 247.00-255.00 445.00-445.00

China

Dalian 251.00-252.00 - - 465.00-470.00***

Shanghai 251.00-252.00 - 243.00-244.00 475.00-480.00***

Qingdao 251.00-252.00 - 243.00-244.00 475.00-480.00***

Hong Kong* 244.00-246.00 242.00-244.00 239.00-241.00 415.00-425.00

Singapore* -209.00-213.00- -205.00-208.00- -199.00-202.00- -420.00-425.00-

Bangkok* +220.00-222.00+ - - -455.00-465.00-

--Note: *Delivered, **MGO, ***LDO,

#agreed price between Nippon Oil Co. and NYK Line

ASIA PRODUCTS MARKET COMMENTARY

GASOLINE:

FOB Singapore prices for 92RON gasoline tumbled on Tuesday, following a loss in naphtha paper swaps values. The November naphtha swaps contract was valued at $47.40/bbl, down $1.80/bbl from Monday. Buying and selling ideas in 92RON gasoline for the loading period between Nov 8-23 were indicated at premiums in the range of $5.00-5.10/bbl FOB Singapore over spot naphtha quotations, flat from Monday. Market players pointed out that higher freight rates and tight vessel supplies continued to prevent Singapore barrels from going to the US West Coast. Despite this closed arbitrage window, many market players expected gasoline's supply-demand fundamentals would be balanced in the near term, with Australia and New Zealand entering into the peak summer driving demand season. The differentials expressed in buying and selling interest for 92RON gasoline would translate into a fixed price of $52.40-52.50/bbl, down $1.80/bbl from Monday, based on the value of Singapore paper swaps that were available as of 6:30 PM Tokyo time on Tuesday.

China's Dalian West Pacific Petrochemical Co, or Wepec, sold one MR-size spot cargo of 92RON gasoline for loading in mid November. This was the second cargo that Wepec committed to export in November. The concluded price was on an FOB Dalian basis at near flat to FOB Singapore quotations (92RON). Besides the deal, Wepec left unsold one or two more MR-size spot cargoes of gasoline for November.

NAPHTHA:

The Asian open-spec naphtha price dived on Tuesday, down $20.00/mt versus the previous day to the range of $455.75-457.50/mt CFR Japan, mainly due to a similar dive in the crude oil price and losses in the NWE naphtha price. Also bearish to the market was continued glut in prompt naphtha delivery in the Asian market. As of 8:00 PM in Tokyo on Tuesday, Nov Brent crude futures contract was down $1.39/bbl to $47.92/bbl from the same time on Monday. The CFR Japan naphtha values for H1 Dec were talked in the range of $453.50-454.00/mt, while the values for H2 Dec were in the range of $455.75-456.25/mt. The values for H1 Jan were, meantime, in the range of $457.00-457.50/mt. The crack spread between Dec Brent futures and the CFR Japan naphtha values for H1 Dec narrowed $11.00/nt to $94.00/mt.

In the open-trade trade, one deal was reported at $456.00/mt for H2 Dec arrival. In the spread trade, the H1/2 Dec contract traded at minus $2.00/mt.

No deals were done in the physical market. Most of end-users in Asia deferred purchase on the prediction for a further widening of the range of discounts for spot naphtha cargoes due to the easing fundamentals. Behind the slacken fundamentals for naphtha were increased naphtha production in Japan and South Korea and the emerging glut in prompt naphtha delivery in the Middle East. It was reported in the spot trade for cargoes to arrive between H2 Nov and H1 Dec that discounts for CFR Japan open-grade naphtha widened to around $4.50/mt.

In the Middle East, several traders reportedly became active in offering FOB Ras Tanura A-310 (S/N) in the spot trade. "Cargoes currently being offered are four to five in total and all of them are scheduled to be loaded in the first half of November," Japan's leading trading house reported. A slump in sales of naphtha FOB Middle East followed the rising freight rates and a succeeding close of the arbitrage window for cargoes from the Middle East to the NWE market.

Prices for CFR North East Asia ethylene cargoes were in the range of $990-1,030/mt, shedding $20.00/mt from Monday. The market remained weak due to the prediction for a further easing of the fundamentals. Some traders increased volume of Iranian ethylene brought to the Asian market, thereby further weakening the fundamentals.

As of 8:00 PM in Tokyo on Tuesday, Northwest Europe Nov naphtha swaps were talked in the range of $454.00-456.00/mt CIF Rotterdam, shedding as much as $20.00/mt from the same time on Monday. The dive in gasoline futures in both Europe and the US pushed lower the naphtha price in the regions. The Dec swaps were discussed in the range of $452.50-454.00/mt, while the Jan swaps were in the range of $451.00-453.00/mt. The H2 Nov Asia/Oct NWE spread showed the latter $1.25/mt higher than the former.

JET/KEROSENE:

FOB Singapore prices for jet fuel/kerosene fell on Tuesday, pushed down by a steep loss in paper swaps values. The November swaps contract was valued at $61.05/bbl, down $2.30/bbl from Monday. Buying and selling ideas for the loading period between Nov 8-23 were indicated at discounts in the range of 40-50cts/bbl FOB Singapore from spot quotations, unchanged from Monday. Market players kept keenly watching for arbitrage opportunities to send jet fuel cargoes to the US West Coast as well as the demand for this coming winter on Tuesday. "Winter demand is a wild card, on which the jet fuel market heavily depends," a trader said. The differentials expressed in bids and offers for jet fuel/kerosene would translate into a fixed price of $60.55-60.65/bbl, down $2.30/bbl from Monday, based on the value of Singapore paper swaps that were available as of 6:30 PM Tokyo time on Tuesday.

FOB South Korea prices for SR-size cargoes of kerosene plummeted on Tuesday, tracking a steep fall in Singapore paper swaps values. Buying and selling ideas were indicated at premiums in the range of $2.50-2.70/bbl FOB South Korea over FOB Singapore quotations, unchanged from Monday. Japanese buyers began checking kerosene availability for loading in H2 November off South Korea, on expectations that domestic prices would catch up with the import cost in the near term. "Japanese buyers have been waiting long enough with this low domestic inventory," an industry source in Seoul said. "Japan will likely rush to import kerosene once the margins on a resale into the domestic market turn into positive territory." Meanwhile, Incheon Oil Refining Co eyed exporting several SR-size spot cargoes of kerosene to Japan for loading between late November and December. "We will be flexible on loading timings depending on buyers' requirements or market conditions," a source at Incheon said. The differentials expressed in bids and offers for loading between Nov 8-23 would translate into a fixed price of $63.55-63.75/bbl, down $2.30/bbl from Monday, based on the value of Singapore paper swaps for November as of Tuesday.

Japanese oil refiners' jet fuel imports to be delivered in November reached 100,000kl, according to a survey conducted by RIM on Tuesday. Behind this move lies the supply shortage of jet fuel, as the refiners strain to produce more kerosene ahead of the peak winter demand season, thus reducing jet fuel production. Idemitsu Kosan Co plans to import one MR-size cargo of jet fuel from an oil major in Singapore on a semi-term contact basis starting from November every month. Meanwhile, Cosmo Oil Co was poised to buy 30,000kl of jet fuel from Kuwait Petroleum Co, or KPC, on an annual term contract basis during this winter starting November. Nippon Oil Corp was poised to import 30,000kl for November delivery, following 40,000kl for October.

Hong Kong's China Resources Co, or CRC, was poised to import three MR-size cargoes of jet fuel for delivery in November. Among these three cargoes, the firm already bought one cargo on an annual term contract basis and would buy two spot cargoes. "We have yet to start negotiations about these two spot cargoes for November," a source at CRC said. The firm earlier bought from Singapore three MR-size cargoes for October, or one as term contract and two as spot buying. Market players believed these two spot cargoes were concluded at a premium of around $1.10/bbl CFR Hong Kong over FOB Singapore quotations. CRC imports jet fuel oil largely to make delivery for Cathay Pacific Airways.

GASOIL:

FOB Singapore prices for 0.5%S gasoil lost ground on Tuesday, mirroring a sharp loss in paper swaps values together with an increase in spot discounts. The November swaps contract was valued at $56.85/bbl, down $2.20/bbl from Monday. Buying and selling ideas for the loading period between Nov 8-23 were indicated at discounts in the range of 75-85cts/bbl FOB Singapore from spot quotations, down 15cts/bbl from Monday. The increase in spot discounts came in line with the oversupply outlook in Asia and poor demand from South East Asia. As if to prove these looser supply-demand fundamentals, gasoil remained well offered on Tuesday, with four sellers showing up against no bidder. The differentials expressed in bids and offers for 0.5%S gasoil would translate into a fixed price of $56.00-56.10/bbl, down $2.35/bbl from Monday, based on the value of Singapore paper swaps that were available as of 6:30 PM Tokyo time on Tuesday.

FOB South Korea prices for MR-size cargoes of 0.5% sulfur gasoil dived on Tuesday, in line with the weakness in Singapore paper swaps values. Buying and selling ideas were indicated at discounts in the range of 60-70cts/bbl FOB South Korea from FOB Singapore quotations, unchanged from Monday. Asian end-users left bids for 0.5% sulfur gasoil at steep discounts on an FOB South Korea basis, expecting ample supply sentiment would persist in the near term. SK Corp sold one MR-size spot cargo of 0.5% sulfur gasoil for loading in H1 November. The concluded price was heard at a discount of around 70cts/bbl FOB South Korea. Market players expected the cargo would be destined to South East Asia. Besides the deal, a combined eight or nine MR-size cargoes of 0.5% sulfur gasoil were left unsold for November loading off South Korea. The differentials expressed in bids and offers for 0.5%S gasoil to be loaded between Nov 13-28 would translate into a fixed price of $56.15-56.25/bbl, down $2.20/bbl from Monday, based on the value of Singapore paper swaps for November as of Tuesday.

FOB Taiwan prices for MR-size cargoes of 0.5% sulfur gasoil fell sharply on Tuesday, tracking a loss in Singapore paper swaps values combined with an increase in spot discounts. Buying and selling ideas were indicated at discounts in the range of 10-20cts/bbl FOB Taiwan from FOB Singapore quotations, down 20cts/bbl from Monday. The increase in spot discounts came in line with sluggish demand from South East Asia. Chinese Petroleum Corp, or CPC, remained in the process of concluding its latest gasoil sell tender for November loading on Tuesday. Through the tender, CPC sought to sell one or two MR-size cargoes of 0.5% or 0.05% or 0.2% sulfur gasoil for loading in November off Kaohsiung. Meanwhile, Formosa Petrochemical Corp, or FPC, would likely export one MR-size spot cargo of 0.05% sulfur gasoil for November. The differentials expressed in bids and offers for 0.5%S gasoil to be loaded between Nov 13-28 would translate into a fixed price of $56.65-56.75/bbl, down $2.40/bbl from Monday, based on the value of Singapore paper swaps for November as of Tuesday.

LSWR:

FOB Indonesia mixed/cracked LSWR prices shed $1.00/bbl on Tuesday, reflecting a dive in the US crude futures on NYMEX. The Pertamina Pricing Formula, or PPF, which market players expected to be applied for loading Nov 18-28, would be at $39.95/bbl, down $1.00/bbl from a day earlier. Premiums to PPF were in the range of $0.90-1.20/bbl, little changed from Monday. The spot trade was underpinned by news that Oct-lifting LSWR sold out. A leading Italian power company reportedly purchased 400,000-600,000bbl of FOB Indonesia mixed/cracked LSWR for late-Oct loading. With the purchase, it was likely that most of 2.2-mil bbl of mixed/cracked LSWR earmarked for export for Oct was done. Meantime, as of Tuesday evening in Singapore, Pertamina was reportedly planning to export a total of 2.25-mil bbl of mixed/cracked and straight-run LSWR combined for Nov. Of the total, FOB Balikpapan mixed/cracked LSWR accounted for 1.8-mil bbl, and FOB Dumai mixed/cracked LSWR accounted for 200,000bbl, while shipments from storage facilities in Sungai Pakning accounted for 250,000bbl. Shipment from Dumai was likely to increase, though, if the breakdown of a secondary unit at the refinery lasted longer than expected. Differentials expressed in bids and offers would translate into a fixed price of $40.95-41.05/bbl based on the expected Pertain Pricing Formula as of Tuesday.

FUEL OIL:

FOB Singapore prices for 180cst fuel oil sank on Tuesday, in tandem with a loss in paper swaps values. The November swaps contract was valued at $207/mt, down $5.00/mt from Monday. Buying and selling ideas for the loading period between Nov 8-23 were indicated at a discount of 50cts/mt to a premium of 50cts/mt FOB Singapore over spot quotations, flat from Monday. Market players expected low inventories in China would support premiums fuel oil's premiums in the current range or above in the short term. The differentials expressed in bids and offers for 180cst fuel oil would translate into a fixed price of $206.50-207.50/mt, down $5.00/mt from Monday, based on the value of Singapore paper swaps that were available as of 6:30 PM Tokyo time on Tuesday.

FOB South Korea prices for MR-size cargoes of 3.5% sulfur fuel oil plunged on Tuesday, dragged down by a decline in Singapore paper swaps values. Buying and selling ideas were indicated at premiums in the range of $7.50-8.50/mt FOB South Korea over FOB Singapore quotations, unchanged from Monday. The fuel oil market in South Korea came to a halt on Tuesday. South Korean refiners already sold out planned cargoes of high-sulfur fuel oil for loading in November. The differentials expressed in bids and offers for loading between Nov 13-28 would translate into a fixed price of $214.50-215.50/mt, down $5.00/mt from Monday, based on the value of Singapore paper swaps for November as of Tuesday.

FOB South Korea premiums for MR-size cargoes of 0.3% sulfur fuel oil were indicated on Tuesday in the range of $52.50-57.50/mt over FOB Singapore quotations (180cst), up $10/mt from Monday. The increase in spot premiums was led by looming tight supply sentiment in North East Asia. SK Corp sold one MR-size cargo and one SR-size cargo of 0.3% sulfur fuel oil for November loading on a spot basis. The former cargo was concluded at a premium of more than $55/mt FOB South Korea and the latter cargo at a premium of slightly less than $60/mt FOB South Korea. Market players expected these cargoes would be destined to Japan.

CFR South China premiums for MR-size cargoes of 3.5% sulfur fuel were indicated on Tuesday in the range of $12-13/mt over FOB Singapore quotations, flat from Monday. In the Guangdong province, Huangpu waterborne prices for high-sulfur fuel edged up to the range of Yuan 2,330-2,350/mt on Tuesday, up Yuan 10/mt from Monday. Market players pointed out tight prompt availability helped boost prices. Meanwhile, the January fuel oil swaps contract prices on the Shanghai futures exchange ended at Yuan 2,177/mt on Tuesday, down Yuan 92/mt from Monday.

Correction: In the Oct 13, 14, 15 & 18 editions, 180cst fuel oil's spot premiums on an FOB Singapore basis should have read "in the range of a discount of 50cts/mt to a premium of 50cts/mt FOB Singapore over spot quotations" instead of "at premiums in the range of $0.50-1.50/mt FOB Singapore over spot quotations" as sent. We apologize for the errors.

ASIA BUNKER MARKET COMMENTARY

JAPAN:

The bunker fuel market in Japan leveled off on Tuesday with prices for 380cst in the range of $237-238/mt in Keihin and Hanshin, and the range of $244-245/mt in Chukyo. Tightness in prompt supply offset the crude oil market's plunge. Spot demand saw a slowdown. Many shipowners refrained from covering their requirements, on the belief that a weaker crude oil market would hammer down bunker prices in the near term. Spot inquiries were placed to seek one lot each for delivery in Yokohama, Imabari and Yokkaichi. Offers for 500mt or larger lots of 380cst were heard in the range of $237-240/mt in Keihin and Hanshin, and the range of $246-249/mt in Chukyo. On Monday, one small lot of 180cst in Chukyo was heard traded around $250/mt and one parcel of 180cst in Sasebo at $242/mt.

SOUTH KOREA:

Prices for 380cst bunker fuel in South Korea eased on Tuesday by $2.50/mt to the range of $230-232/mt, reflecting the crude oil market's weakness. South Korean refiners asked 380cst in the range of $230-233/mt. But supply tightness remained unabated as several South Korean refiners refrained from accepting fresh orders due to low inventories. South Korean refiners received a combined 11,000mt or so in inquiries as of 18:00 Seoul time on Tuesday, down 3,000mt from Monday.

SINGAPORE:

Prices for 380cst bunker fuel in Singapore dropped on Tuesday by $4.50/mt to the range of $199-202/mt, in line with a fall in local fuel oil cargo values. Offers for 380cst were made by oil majors in the range of $202-204/mt, compared with the range of $199-202/mt asked by independent suppliers. One lot of 380cst was heard traded at $201/mt. A combined 6,000mt or so was sought in inquiries on Tuesday, down 1,000mt from Monday.

ASIA PRODUCT TRANSACTIONS

Date Product Quantity Seller Buyer Price($) Basis Timing

--GASOLINE

10/19 92RON MR Wepec ? Spr92flat FOB Dalian 11/11-20

--NAPHTHA

10/19 O/S MR Glencore Sietco 456.00 CFR FE 12/16-31

10/19 H1/H2 Dec Spread: trader/trader at minus 2.00

--GASOIL

10/19 0.5%S MR SK ? Spr-0.70 FOB Ulsan 11/1-15

--FUEL OIL

10/19 0.3%S MR SK ? Spr180cst+above55 FOB Ulsan 11/1-30

10/19 0.3%S SR SK ? Spr180cst+below60 FOB Ulsan 11/1-30

MARKET NEWS

--S Korea crude throughput at 2.40-mil b/d, up 2.6% on week

Combined crude oil throughput in South Korea on Oct 19 was at 2.40-mil b/d, up 2.6% from a week before, according to a RIM survey of refiners' operating rates on Tuesday. South Korea has a total refining capacity of 2.44-mil b/d. Utilization of refining capacity was at 98.4%, up 2.4% points from a week earlier (SEE TABLE BELOW).

SK LG-Caltex S-Oil Hyundai Incheon

Capacity (kbd) 810 600 443 310 275

Operation rate (pct) average

10/19/04 101.2 103.3 124.2 100.0 36.4 98.4

10/12/04 93.8 103.3 124.2 100.0 36.4 96.0

10/05/04 93.8 103.3 124.2 100.0 36.4 96.0

09/21/04 92.6 103.3 121.9 90.3 23.6 92.5

--S Korea SK Corp lifts Ulsan crude runs 7.9% on week to 820,000b/d

South Korea's SK Corp lifted crude throughput at its 810,000b/d Ulsan refinery to 820,000b/d or 101.2% capacity starting early this week, up 7.9% from a week before, a company source said Tuesday. The decision came as SK Corp is poised to beef up kerosene production ahead of the peak-demand winter season. The move was also backed by wide refining margins for middle distillates.

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