This week, Shanghai fuel oil prices remained volatile but ultimately saw an upward trend. On Thursday, the price hit a new annual high of 3,250 yuan per ton. Compared to international crude oil prices, fuel oil has shown greater stability, largely due to strong spot prices and improved price differentials between periods. Meanwhile, Singapore fuel oil prices declined slightly this week to $314 per ton, a 4% drop from the previous week. In contrast, New York crude oil futures rose by 3.4%, while Shanghai fuel oil futures increased by 1%. The price correlation between Singapore fuel oil, international crude, domestic fuel oil, and futures has improved, signaling a more rational market.
Currently, the main driver behind fuel oil prices is the international crude oil market, with its influence growing stronger than ever. According to customs data, China’s fuel oil imports fell for the seventh consecutive month in August, reaching only 1.96 million tons—a 10.3% decline year-on-year. From January to August, total imports dropped by 15.8% to 17.49 million tons. However, imports from Russia surged by 76.2% in August to 616,073 tons, indicating strong demand from small refineries. Despite this, recent profit margins for these smaller facilities have shrunk, suggesting a potential slowdown in demand.
The U.S. Department of Energy reported that Hurricane Katrina and Rita have caused at least 15% of refining capacity to be shut down for several more weeks, raising supply concerns. As refined oil prices strengthened, crude oil prices climbed again, reinforcing the $63 support level and boosting bullish sentiment. While the long-term crude oil market remains dependent on OPEC production, current conditions are not favorable.
In the Huangpu market, fuel oil is in short supply, with inventory levels extremely low. Import costs remain 150–200 yuan higher than futures prices. Given the ongoing upward trend in crude oil, the likelihood of continued fuel oil price increases in the short term is high. Additionally, the upcoming holiday season is accelerating the convergence of futures and spot prices.
Guangzhou Dongsui Auto Accessories Co., Ltd. , https://www.dongsuiautoparts.com