SunSirs: Energy Industries Bulk Commodity Intelligence (February 27, 2026)

Macroeconomics

1. [Foreign Exchange] The People's Bank of China announced that, effective March 2, 2026, the foreign exchange risk reserve ratio for forward foreign exchange sales will be lowered from 20% to 0 to promote the development of the foreign exchange market and support enterprises in managing exchange rate risks. The central bank will continue to guide financial institutions to optimize exchange rate hedging services for enterprises and maintain the RMB exchange rate basically stable at a reasonable and balanced level.

2. [Bonds] According to publicly released bond issuance information from local finance departments, as of February 25, the issuance scale of local government bonds nationwide has exceeded 2 trillion RMB. Therefore, the issuance scale of local government bonds in the first two months of this year (approximately 2.28 trillion RMB) is expected to increase by 22% compared to the same period last year.

3. [Federal Reserve] Federal Reserve Governor Milan reiterated that despite improvements in the labor market, a 100 basis point rate cut is still expected in 2026, and he favors acting sooner rather than later.

4. [Bank of Japan] Bank of Japan Governor Kazuo Ueda stated that the central bank will carefully study the data at its March and April meetings to decide whether to raise interest rates, leaving open the possibility of a near-term rate hike. If Japan makes progress in achieving its economic and price forecasts, the central bank will continue to raise interest rates.

Energy

1. [Crude Oil] On February 26, international crude oil futures fluctuated narrowly. US WTI crude oil futures fell slightly, with the April contract settling at $65.21 per barrel, a decrease of $0.21 or 0.3%. Brent crude oil futures rose slightly, with the May contract settling at $70.84 per barrel, an increase of $0.15 or 0.2%.

2. [Crude Oil] Latest news indicates that Saudi Arabia is increasing its oil production and exports as a contingency plan for escalating geopolitical tensions in the Middle East.

3. [Fuel Oil] On February 26, China National Petroleum Corporation (CNPC) quoted 5,350 RMB/ton for 180cst low-sulfur fuel oil (ex-works) in Shanghai, an increase of 50 RMB/ton from the previous trading day. The quoted price for 120cst low-sulfur fuel oil (ex-works) was 5,450 RMB/ton, also an increase of 50 RMB/ton from the previous trading day.

4. [LNG] On February 26th, liquefied natural gas (LNG) prices in Inner Mongolia declined. Inner Mongolia Huineng LNG prices decreased by 50 RMB/ton, with the latest quote at 2,750 RMB/ton; Xingxing Energy LNG prices decreased by 100 RMB/ton, with the latest quote at 2,810 RMB/ton.

5. [Petroleum Coke] On February 26th, Shandong Dongfang Hualong Group quoted petroleum coke at 1,450 RMB/ton, a decrease of 50 RMB/ton from the previous trading day, with a sulfur content of 7.0% and a daily production of 800 tons.

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