Summer demand peak past In the short term, high sulfur may continue to operate weaker than low sulfur

1.
On the supply side, the inflow of arbitrage cargoes from the West was low in October, and the volume of arbitrage cargoes in November is expected to remain low
.
Lower arbitrage volumes from the West will partially offset increased regional supply, with supply remaining tight
in Asia's low-sulphur fuel oil market.
The high-sulphur market continues to face the problem of sufficient supply
due to the continuous flow of Russian shipping cargo east of Suez and the high operating rate of refineries in the Asia-Pacific region.
Domestically, according to Jinlianchuang statistics, China's bonded marine oil exports in the first three quarters of this year basically reached the level of
the same period last year.
In the fourth quarter, the domestic low-sulfur export quota was abundant, the supply of refineries was stable, and it is expected that the export level of bonded fuel oil for the whole year is expected to rise
steadily and slightly.

2
.
On the demand side, demand for low-sulphur bunker oil was mostly weak throughout September.
Demand for spot bunker fuel oil in Singapore ports has surged since mid-October, and marine fuel oil sales are expected to rise steadily in October and remain stable
in November as shipowners are eager to confirm deliveries by the end of the month due to supply shortages.
In addition, the power sector in Europe and North Asia is also increasing demand
for low-sulphur fuel oil power generation.
In contrast, high sulfur demand lacked bright spots
overall due to the end of the peak power generation season.

3.
In terms of oil prices, this month, international oil prices rose
as a whole.
Due to the factors of autumn inspection of refineries, the United States has shown a pattern of phased accumulation of crude oil and destocking of refined oil, but due to the impact of the sharp increase in crude oil exports and the release of strategic reserves, the total US crude oil inventory fell to a 21-year low; Coupled with OPEC+ production cuts that will begin in November, the overall marginal tightening
of global crude oil supply.
On the macro front, expectations of the Fed's interest rate hike in December have begun to weaken recently, and overseas risk appetite has rebounded significantly, pushing commodity prices such as crude oil and copper higher
.
However, global inflation shows no signs of cooling under monetary tightening, and the risk of recession overseas remains, which worries about future demand growth prospects
.
At present, the global oil market is still in a state of long-short game, pay attention to the situation of the
US midterm elections in November.

4.
Overall, due to the low inflow of arbitrage cargo, the Asian low-sulfur fuel oil market will maintain a tight supply situation in the near future; At the same time, the increase in pre-season terminal filling activities at the end of the year, seasonal power generation demand from Japan and South Korea is also supporting the market.
Steady bunkering demand and limited carry trades from the West supported the low-sulphur market, which is expected to remain firm
for the remainder of the fourth quarter.
The Asian high-sulphur fuel oil market continues to come under pressure, with Russian exports to Asia surging in the volume of high-sulphur fuel oil and the cracking spread of high-sulfur fuel oil continuing to decline
as the summer demand peak passes, refineries in the region maintain high operating rates.
In the short term
, high sulfur may continue to operate weaker than low sulfur.