News summary

The crude oil sector showed differences between internal and external markets, and SC crude oil futures fell slightlyplaytoearnspace; Political instability in the Middle East affects market sentiment; inflation in the United States is stabilizing and expectations of the Federal Reserve to cut interest rates are heating up. The fuel oil sector was divided, with high-sulfur fuel futures rising slightly, and fuel oil inventories in Fujairah and Europe fluctuated slightly.

Newsletter text

[The crude oil market shows divergence]

Recently, the crude oil market has been volatile, with intra-market SC crude oil futures falling slightly 0.0% in night tradingplaytoearnspace.92%, and the closing price was 612.2 yuan/barrel; the price difference structure from July to August showed Backwardization, at 1.4 yuan/barrel. At the same time, outer-market Brent crude oil and WTI crude oil futures closed down 1.41% and 1.36% respectively to US$82.53/barrel and US$78.22/barrel.

[Geopolitical dynamics in the Middle East affect market nerves]

The Iranian News Agency reported that the Iranian President and his party suffered a helicopter accident, and President Leahy and Foreign Minister Abdullahiyan were unfortunately killed. The market remains highly concerned about the follow-up development of this incident and its impact on the political pattern in the Middle East.

[U.S. inflation data supports Fed policy expectations]

U.S. inflation showed that the unseasonally adjusted CPI annual rate fell to 3.4% in April, in line with expectations. Both the monthly and year-on-year growth rates of the core CPI have slowed down, which may lead to higher market expectations for the Federal Reserve to cut interest rates. Despite this, the exchange rate of the US dollar against other currencies remained stable around 104.5.

[Demand adjustments affect domestic crude oil prices]

The adjustment of domestic crude oil demand has put pressure on SC prices in recent months, and the SC price structure in recent months has shown weakness recently.

[The trend of the fuel oil sector diverges]

The fuel oil sector diverged. FU high-sulfur fuel futures rose slightly by 0.37% at 3483 yuan/ton in night trading; while LU low-sulfur fuel futures fell 0.98% at 4231 yuan/ton in night trading.

[The trend of high-sulfur combustion is strong]

High-sulfur fuels maintain a strong trend, with the FU spread from September to January remaining above 150 yuan/ton, while the LU-FU09 spread and the outer market Hi-5 both show a weak pattern in the near future.

[Changes in inventory levels in the Middle East and Europe]

As of May 13, Fujairah fuel oil inventories increased by 458,000 barrels month-on-month, an increase of 4.8%, to a total of 9.963 million barrels. Fuel oil inventories in the European ARA region decreased by 11,000 tons from the previous week, and are currently 1.528 million tons.