20251109-国泰期货-Fuel_Oil_Market_Report_Weekly_35页_3mb

Fuel Oil Market Report Summary

1. Summary

• HSFO: Spot prices rebounded, but transaction premiums remain weak, suggesting market equilibrium. Russia's refined fuel oil exports may drive spot purchases and prices.
• LSFO: Refineries completing maintenance by late Nov 2024 reduce external supply; rumors of state-owned refineries shifting export quotas to gasoline may tighten local port spot supply, supporting LU prices.
• FU vs. LU: FU remains weak short-term due to short covering; LU maintains strength due to increased warehouse receipts and higher delivery demand. The LU-FU price spread is expected to recover.
• Key Risks: Geopolitical conflicts (Middle East, Latin America) and China-US trade negotiations.
• Market Outlook: Prices may stabilize until September 2025, reflecting medium-term fundamentals.

2. Supply & Demand

• Refinery Utilization: High usage maintained, with global maintenance affecting different processes (FCC/CDE).
• Production & Supply: LSFO domestic production in China slightly increased in Oct 2024.
• Demand: Singapore bunker fuel sales rose in Oct 2024, influenced by global shipping activity.
• Inventory: Singapore and Fujairah inventories declined, indicating tighter global markets; U.S. inventories remain moderately elevated.
• Supply & Inventory: High utilization supports prospects for supply growth if maintenance ends.

3. Price & Spread

• HSFO (Singapore): Spot premiums not significantly enhanced; reflect cautious market sentiment.
• LSFO (Singapore): High crack spreads across regions; near-term premium to Chinese LU is strong.
• Pricing Structure: Spot prices in Asia-Pacific and North America slightly diverged from Shanghai prices.
• Calendar Spreads: NWE and Singapore calendar spreads show inversion, hinting at backwardation or tightness.
• Cracking Spreads: High in Singapore and the U.S., reflecting buyer interest.

4. Asian/Chinese Market

• HSFO vs. LSFO: Asian arbitrage opportunity exists; Chinese futures (LU) price difference tightens.
• Chinese Fuels: Domestic spot prices (Zhoushan) slightly above international levels; cross-border arbitrage active.

Global inventories are tight, supporting medium-term prospects for higher prices.