20250615-国泰期货-Fuel_Oil_Market_Report_Weekly_27页_3mb

Guotai Junan Futures Fuel Oil Market Report Summary

Date: June 15, 2025

Summary

1. Review
   Global fuel oil prices showed increased volatility this week, driven by geopolitical tensions, particularly the Iran-Israel conflict. Cracking margins and monthly spreads eased from previous highs but remained under pressure.

2. Outlook

   • Key Risk Factor: The Strait of Hormuz navigation issue poses a severe threat to global fuel oil exports, especially from Middle Eastern countries (Saudi Arabia, UAE, Iraq, Kuwait), potentially disrupting high sulfur fuel oil (HSFO) exports. Iran's declining output exacerbates the situation.
   • Impact: An interruption in shipping routes would lead to a significant reduction in HSFO exports (≈85% of Middle East volumes), boosting demand for Singapore HSFO (380cst) and potentially pressuring low sulfur fuel oil (LSFO) supplies in the Asia-Pacific region, including Kuwait.
   • Spot Supply: Brazil's declining LSFO exports to Singapore further tightens the spot market, supporting prices.

3. Market Trends:

   • Refining and Supply:

     • High CDU utilization rates and scheduled maintenance in Chinese refineries contribute to supply constraints. Similar trends observed globally.
     • Production figures (HSFO/LSFO) in China and globally highlight tight margins.

   • Demand:

     • Key demand regions: Singapore bunker fuel, Chinese domestic consumption, and port LSFO usage.

   • Inventory:

     • Singapore and Fujairah inventories remain tight, while European and US inventories fluctuate.

4. Price & Spread:

   • Asian Markets: Singapore HSFO prices surged amid geopolitical risks.
   • European Markets: NWE demand supports prices.
   • Spread Analysis: HSFO/LSFO spread tightens due to export disruptions, remaining sensitive to Middle East developments.

5. OTC and Future Market:

   • Swap rates in Singapore and NWE reflect volatility, signaling concerns from market participants.
   • Chinese fuel oil futures (LU/FU) indicate positive momentum, anticipating future higher prices driven by supply fears.

6. Import & Export:

   • Chinese HSFO imports decreased while exports remained modest.

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