SunSirs: Energy, Domestic 180CST Fuel Oil Price Rose first and then Fell in April

According to the latest monitoring data of SunSirs, the average price of 180CST fuel oil mainstream market in China as of April 30 was 3,640.00 RMB/ ton, up and down by -0.82% compared with 3670.00 RMB/ ton at the beginning of the month.

On April 29, the fuel oil commodity index was 73.72, down 0.2 points from yesterday, down 36.40% from the highest point 115.91 (October 17, 2018), and up 59.98% from the lowest point 46.08 on August 15, 2016. (Note: cycle refers to 2011-09-01 to now)

Analysis of Influencing Factors

Product: the price of domestic fuel oil rose first and then fell in April, with light turnover. The mainstream price at the end of the month was about 3,500 RMB/ ton. On April 28, the spot price of Singapore fuel oil (high sulfur 380cst) was $111.36/ ton, down $5.9/ ton compared with the previous day (converted to 787 RMB/ ton at the RMB exchange rate of that day, excluding freight and other costs). According to data released by ESG, Singapore's inventory of residual fuel oil (excluding asphalt) including fuel oil and low sulfur waxy residual oil decreased by 2,212,000 barrels, to 22.329 million barrels in the week ended April 22; the inventory of light distillate oil decreased by 203,000 barrels, to 16.273 million barrels; the inventory of medium distillate oil decreased by 491,000 barrels, to 14.442 million barrels.

Industry chain: upstream: according to the monitoring of SunSirs, WTI crude oil in the United States at the beginning of the month was $20.48/ barrel, at the end of the month was $15.35/ barrel, with a monthly increase or decrease of -25.05%; Brent crude oil at the beginning of the month is $26.35/ barrel, at the end of the month is $24.23/ barrel, with a monthly increase or decrease of -8.05%. At the beginning of the month, the output reduction of OPEC+ meeting was lower than the market expectation, and the crude oil demand in April was expected to decline by more than 20 million barrels/ day, or even 30 million barrels/ day; the delivery oil price of WTI futures fell to a negative value in the last ten days, and the future market mentality was pessimistic.

Market Forecast

According to energy analysts of SunSirs, influenced by international public health event of COVID-19, international crude oil has fallen sharply. At present, the shipping market is generally in a downturn, with limited terminal demand and light transaction. The demand for just needed crude oil is dominated. In the near future, low-cost crude oil will flow into the market. Affected by the cost and supply-demand relationship, the fuel oil market price is expected to continue to decline in May, with a price range of 3,200-3,600 RMB/ ton.

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