SunSirs: International Crude Oil Plummeted, Fuel Oil 180CST Market was Weak (March 15-19)

As of March 19, the average 180CST price of domestic fuel oil was 4,775.00 RMB/ ton (including tax), down 1.04% from 4,825.00 RMB/ ton on March 15, according to the data of SunSirs. The fuel oil commodity index on March 19 was 96.71, unchanged from the previous day, down 16.56% from 115.91 (October 17, 2018), the highest point in the cycle, and up 109.87% from 46.08, the lowest point on August 15, 2016. (Note: period refers to the period from September 1, 2011 to now)

Domestic marine oil raw materials have limited support for fuel oil 180CST. The average price of Fukuang shale oil in the latest bidding on March 16 was 3,436 RMB/ ton, down 130 RMB/ ton. According to SunSirs, as of March 19, the low sulfur quotation of fuel oil 180CST in Zhoushan area was 4,600 RMB/ ton, of fuel oil 120 CST was 4,700 RMB/ ton, and the low sulfur quotation of fuel oil 180CST in Shanghai area was 4,850 RMB/ ton, of fuel oil 120 CST was 4,950 RMB/ ton.

Last week, the international crude oil price plummeted, and the support for fuel oil price was limited. According to SunSirs, oil prices have been falling for five consecutive trading days. At the macro level, due to the release of water from the Federal Reserve and central banks, inflation expectations continued to rise, US bond yields rose, and the prices of risky assets such as stock markets and commodities were suppressed. In addition, the pace of global economic recovery was once again dragged down by the epidemic, this time mainly from the European region. The European vaccination process was blocked, which led to the expectation of a slowdown in economic recovery and the suppression of oil prices. WTI and Brent crude oil fell to two-week lows one after another. WTI closed below US $60. WTI crude oil hit the biggest one-day decline in the second half of the year.

SunSirs energy analysts believe that a sharp drop in crude oil may lead to a downward trend in raw material prices. The fuel oil market is mainly on the lookout, and some enterprises will set prices this week. At present, the downstream demand of the ship fuel market is light, and the terminal mainly purchases on demand, while the downstream replenishment is cautious. China fuel oil prices are expected to decline this week.

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