Overseas monetary policy tightening pressure still exists The trend of fuel oil has reversed

1.
On the supply side, Singapore is expected to receive 1.
50-1.
8 million mt of low-sulphur fuel oil from the West in November, up
from 1.
2-1.
5 million mt in October.
A Singaporean trader said Western low-sulphur fuel oil arbitrage cargoes would arrive higher
in the second half of November.
Russian fuel oil continues to flow into Asian markets, while refineries in the region remain at high operating rates and supply remains abundant
in the high-sulphur market.
Singapore's fuel oil inventories recorded 18.
949 million barrels in the week ended October 31, down 2.
196 million barrels (10.
39%) from the previous week; Fujairah fuel oil inventories recorded 12.
909 million barrels, up 563,000 barrels (4.
56%) from the previous week; Fuel oil inventories in the ARA region recorded 1.
18 million mt, up 192,000 mt (19.
43%)
month-on-month.

2.
On the demand side, in the short term, the pressure brought by the overseas economic downturn on the dry bulk market cannot be ignored, and at the same time, due to the increasing inflationary pressure of the global economy and the continuous increase in the risk of overseas recession, container demand has begun to decline
.
The early release of consumer demand and the continuous replenishment of warehouses in Europe and the United States have made the pressure on demand on the inventory side gradually appear
.
The continuous transfer of Russian crude oil exports and the increase in cross-regional arbitrage of refined oil products will bring about the reshaping of the global oil trade pattern, and the increase in the average distance of oil transportation is expected to effectively support transportation demand
.

3.
In terms of oil prices, EIA and API national commercial crude oil inventories fell last week, while strategic reserve inventories also continued to decrease
.
In terms of refined oil products, gasoline was destocked and refined oil accumulated, while refinery operating rates rebounded, and crude oil production fell by 100,000 barrels
again.
With the gradual end of the autumn inspection of refineries, coupled with the approaching date of sanctions against Russian oil on December 5, it is expected that US crude oil and refined oil exports will increase, the supply and demand of US crude oil will gradually tighten, and Russian crude oil exports will decrease to a
certain extent 。 On the macro front, at the November interest rate meeting last week, the Fed raised interest rates by 75 basis points as scheduled, and Powell said that he was open to reducing interest rate hikes in the next two meetings, but at the same time stated that "the Fed is firmly committed to reducing inflation and strongly promises to lower US inflation to the target of 2%", the market expects the probability of raising interest rates by 50 basis points in December to increase, but the end point of interest rate hikes may be higher and longer, and the pressure of overseas monetary policy tightening on the macro side still exists
.

4.
Overall, last week, the international oil price range fluctuated, and the Singapore fuel oil market also fluctuated
in a narrow range.
From a fundamental point of view, the fundamentals of the low-sulfur fuel oil market began to weaken, and the high-sulfur fuel oil market continued to come under pressure
.
Recently, the structure of the Asian low-sulphur fuel oil market has begun to weaken
due to expectations of increased supply.
At the same time, marine fuel demand was weak, and although tanker performance was acceptable, seasonal demand for container ships grew modestly
.
The low-sulphur market is likely to face downward pressure
in the coming weeks.
While China's modest demand is currently providing some support to fundamentals, Asia's high-sulphur fuel oil market is expected to run
under pressure until the end of the year due to the continued arrival of Russian goods.
From the current high and low sulfur fundamentals, the structure of low sulfur that was significantly stronger than high sulfur in the short term may narrow slightly
.
Continue to monitor the arrival of
arbitrage cargoes in Singapore.