Market sentiment has improved In the short term, fuel oil prices are expected to follow the range of crude oil

1.
On the supply side, the recent rise in gasoline cracking spreads may prompt Asia-Pacific refiners to increase the utilization rate of catalytic crackers, which in turn may lead to a certain degree of tightening of regional low-sulfur fuel oil supply
.
The recent tight supply in the low-sulphur market may also be affected
by the continued surge in tanker freight rates.
The Baltic-Northwest Europe route of the Russian Afra tanker has been replanned, while EU countries that purchase crude and fuel oil from other suppliers such as the United States and the Middle East have also tightened the global supply
of Afra tankers.
In terms of sailing schedules, arbitrage inflows from the West to Singapore did not increase
in December.
Singapore is expected to receive 1.
30-1.
8 million mt of low-sulphur fuel oil from western Suez in December, compared to about 1.
50-1.
8 million mt
in November.
In addition, the inventory of the world's three major ports has fallen as a whole recently, and Singapore's fuel oil inventory recorded 19.
894 million barrels last week, an increase of 166,000 barrels (0.
84%) from the previous week; Fujairah fuel oil inventories recorded 13.
213 million barrels, down 1.
213 million barrels (8.
41%) from the previous week; Fuel oil inventories in the ARA region recorded 1.
006 million mt, down 95,000 mt (8.
63%)
month-on-month.

2.
On the demand side, the import of low-sulfur fuel oil power generation demand in regions such as Japan and South Korea has gradually increased
.
There were some signs of improvement in shipping, with dry bulk vessels gradually increasing their speeds, and the Baltic Dry Freight Price Index rising to a nearly three-week high
.
At the same time, valuations for Singapore's downstream low-sulphur bunker fuels are expected to increase in the near term due to tight spot supply, which will slightly boost
demand in the end-shipping market.

3.
In terms of oil prices, EIA and API U.
S.
commercial crude inventories fell sharply more than expected last week, mainly due to lower imports and higher exports, while refined oil products including gasoline and refined oil continued to accumulate, while refinery operating rates remained high
.
Last week, European diesel turned to a subsidized structure in recent months, or showed a marginal easing
of its fundamentals.
Russia's diesel exports are scheduled to rise about 20 percent month-on-month to 2.
48 million mt (about 600,000 b/d) in December, the highest value
this year, the data showed.
On the macro front, Fed Chairman Jerome Powell's speech last week said that the pace of interest rate hikes may slow down in December, which led to a better market sentiment
.
Subsequently, OPEC+ will meet again on December 4, and the market expects OPEC+ to maintain the previous 2 million barrels per day production reduction plan, while continuing to pay attention to the Russian oil embargo window
.

4.
Overall, last week, international oil prices first fell and then rose, and Singapore's fuel oil market also fell first and then rose
.
From a fundamental point of view, the low-sulfur fuel oil market is relatively firm, and the high-sulfur fuel oil market continues to come under pressure
.
Due to the previous weak prices in Singapore and the impact of high freight rates, the east-west arbitrage window was closed, and the import of arbitrage goods from the West is expected to remain low in December
.
In addition, gasoline prices have begun to rise, refiners are once again diverting resources to produce gasoline and diesel, so refinery production in the region will also decline, and Singapore's low-sulphur marine fuel oil market supply will be supported
.
However, it should be noted that last week's European diesel turned to a subsidized structure, or showed a marginal relaxation
of its fundamentals.
This indicates a further weakening
of diesel supply support for low sulphur.
Therefore, there is still some potential pressure
on the low sulphur market.
Although high-sulfur fuel oil is supported by incremental demand from the refinery side, it is still suppressed by high supply and high inventory, and the large inflow of Russian cargoes is an important reason for oversupply in the market, and the high-sulfur fuel oil market is still under pressure
in the short term.
In the short term
, it is expected that the absolute price of fuel oil may follow the range of crude oil.