Report Summary 1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report - The fuel oil contracts showed an overall oscillating trend this week, following the fluctuation rhythm of international crude oil. The main influencing factors were OPEC gradually relaxing production cuts, the release of spare production capacity in oil - producing countries like Saudi Arabia, and the increase in medium - sulfur crude oil supply, which supported the fuel oil supply and might further grow after refinery maintenance ended. Russia's refinery operating rate declined due to intensified US sanctions and Ukrainian drone attacks, but the high - sulfur fuel oil shipment in November was expected to be 2.21 million tons, a month - on - month increase of 350,000 tons, showing signs of supply recovery. If the situation in Ukraine eases, it might drive a further increase in Russian supply [2]. - The fuel oil market is expected to maintain a range - bound operation in the short term, affected by crude oil oscillations, inventory fluctuations, and marginal changes in industrial supply and demand. With a mix of bullish and bearish factors, the market is suppressed by crude oil prices above and supported by refinery substitution demand and trade easing below, lacking a continuous trend driver. Future attention should be paid to crude oil price trends, geopolitical situation changes, Singapore fuel oil inventory changes, domestic fuel oil production, and import - export data changes [12]. 3. Summary According to Relevant Catalogs 3.1 Futures Market 3.1.1 Contract Quotes - The main fuel oil contract FU2601 closed at 2,501 yuan/ton this week, a decrease of 1 yuan/ton or 0.04% from the previous trading week's settlement price. The highest price was 2,522 yuan/ton, the lowest was 2,426 yuan/ton, the trading volume was 2,548,897 lots, and the open interest was 201,892 lots, a decrease of 21,702 lots [3]. 3.1.2 Variety Prices - The fuel oil futures contract prices presented a backwardation market pattern of near - term high and long - term low, showing a near - strong and long - weak performance overall. The liquidity of the main contract FU2601 continued to be concentrated, and the open interest of the FU2602 contract also showed a steady increase [6]. 3.2 Spot Market 3.2.1 Basis Data - The fuel oil benchmark price decreased compared with the beginning of last month, but specific values were not provided in the text [10].

1. Report's Investment Rating for the Industry - There is no information provided regarding the report's industry investment rating. 2. Core Viewpoints of the Report - Low-sulfur fuel oil supply has increased more than expected, and attention should be paid to the impact of refinery device changes on supply. The low-sulfur supply gap disturbance has subsided, and the expected low-sulfur output has significantly increased. The low-sulfur winter power generation demand currently has no driving force [4]. - High-sulfur fuel oil is expected to remain stable and weak in the fourth quarter. Although Russian energy facilities have been attacked, the overall high-sulfur export volume has not been significantly affected. The near - term high - sulfur export from Mexico has significantly rebounded. The fuel feed demand has weakened month - on - month [4]. - For trading strategies, both high - and low - sulfur fuel oils are in a weak and volatile state. It is not recommended to go long for now. The low - sulfur cracking has weakened, and the high - sulfur cracking remains stable at a low level. It is advisable to take a wait - and - see approach for options [5]. 3. Summary by Relevant Catalogs 3.1 Comprehensive Analysis and Trading Strategies 3.1.1 Comprehensive Analysis - Low - sulfur fuel oil: Supply has increased more than expected. The resumption of oilfield operations and exports in South Sudan has eliminated the supply gap disturbance. Refinery device changes in various regions, such as the early and extended maintenance of Dangote refinery's RFCC device and the delay of primary processing device maintenance, are affecting supply. The low - sulfur winter power generation demand lacks driving force [4]. - High - sulfur fuel oil: It is expected to remain stable and weak in the fourth quarter. Russian high - sulfur exports are slightly affected by the attacks, and Mexican high - sulfur exports have rebounded. The fuel feed demand has weakened due to the expected early issuance of crude oil quotas in 2026 [4]. 3.1.2 Strategies - Unilateral trading: Both high - and low - sulfur fuel oils are in a weak and volatile state, and it is not recommended to go long [5]. - Arbitrage: Low - sulfur cracking has weakened, and high - sulfur cracking remains stable at a low level [5]. - Options: Take a wait - and - see approach [5]. 3.2 Core Logic Analysis 3.2.1 High - Sulfur Fuel Oil Supply - Russia: Energy facilities have been continuously attacked, but the overall high - sulfur export volume has not been significantly affected. Some refineries have been damaged, and the export volume has slightly decreased month - on - month. The EU is planning the 20th round of sanctions against Russia [8][9]. - Mexico: The near - term high - sulfur export has significantly rebounded. The Tula coking unit has been put into operation, and the Olmeca refinery has frequently adjusted its maintenance plan. The high - sulfur output is expected to gradually decrease [13]. - Middle East: The US sanctions against Iran continue. After the demand subsides, the high - sulfur export has increased. Iraq plans to supply more than 6 million tons of high - sulfur fuel oil from January to June 2026 [18][19]. 3.2.2 High - Sulfur Fuel Oil Demand - Feed demand: The expected early issuance of crude oil quotas in 2026 has weakened the high - sulfur feed demand. The actual logistics arrival volume has not increased significantly in the context of the fourth - quarter crude oil quota gap [23][24]. - Marine fuel demand: It provides stable support, and the marginal increase comes from the stable growth of the number of ships equipped with desulfurization towers [28]. - Power generation demand: It has completely subsided, especially in Egypt and Saudi Arabia [31]. 3.2.3 Low - Sulfur Fuel Oil Supply - Pan - Singapore region: The expected excess supply is gradually decreasing with the increase in RFCC device operation rates. The return of the Malaysian Rapid refinery's RFCC device has been delayed, and the Indonesian Balikpapan refinery is planning to expand its gasoline production [34][36]. - Sudan: The low - sulfur crude oil supply was briefly interrupted and then resumed. The low - sulfur crude oil has been redirected to the Pan - Singapore region [37][38]. - Nigeria: The low - sulfur export supply has increased more than expected. The Dangote refinery has adjusted its device maintenance plan, and the low - sulfur export is expected to increase significantly in December [39][41]. - Middle East: The return of the Al - Zour refinery's devices has been delayed, and there is still a short - term supply gap [42][44]. 3.2.4 Low - Sulfur Fuel Oil Demand - There is no specific driver. The marine fuel demand is stable, and the power generation economy is inferior to that of natural gas [45]. 3.2.5 China's Low - Sulfur Fuel Oil Market - The bonded low - sulfur export quota in the fourth quarter has tightened. The overall quota in 2025 has slightly decreased compared to 2024. The quota usage rate as of October is about 81%, and the remaining quota in the fourth quarter is expected to be tight but still sufficient [50]. 3.3 Weekly Data Tracking 3.3.1 Fuel Oil Spot - There are charts showing the price trends of Brent crude oil, HSFO380, LSFO, and their spreads with Brent crude oil [54][55][57]. 3.3.2 High - Sulfur Fuel Oil Cross - Region and Cross - Period Spreads - There are charts showing spreads such as ARA Brent Crack, Singapore high - sulfur M1 - M2, and HSFO380 spot discounts [60][61][63]. 3.3.3 Low - Sulfur Fuel Oil Cross - Region and Cross - Variety Spreads - There are charts showing spreads such as Singapore LSFO - GO, LSFO M1 - M2, and Singapore low - sulfur spot discounts [67][68]. 3.3.4 Natural Gas - Fuel Oil Price Ratio - The report provides data on the equal - calorific - value price ratio of various fuels, including Singapore 380, Singapore 180, Singapore 0.5%, JKM, GO10ppm ARA, and TTF [70][71]. 3.3.5 Cross - Region Freight Reference - There are charts showing freight rates from Russia to Singapore, Rotterdam to Singapore, etc. [73][74]. 3.3.6 Singapore Bunkering Spreads - There are charts showing spreads such as Singapore HSFO Exwharf - MOPS and Singapore LSFO Exwharf - MOPS [76][77]. 3.3.7 Fuel Oil Inventory Structure - There are charts showing the inventory trends of fuel oil in Singapore, ARA, Fujairah, Japan, and the US [79][80][81]. 3.3.8 Northwest Europe Inventory Structure - There are charts showing the inventory trends of gasoline, diesel, and refined oil in ARA [86][87]. 3.3.9 US Gulf Inventory Structure - There are charts showing the inventory trends of gasoline, diesel, Cushing crude oil, and commercial crude oil in the US [89][90].

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - Short - term demand for low - sulfur and high - sulfur fuel oil around the Singapore hub is expected to remain weak, with buying interest fluctuating. The downstream market is oversupplied, and short - term fuel oil will continue to operate at a low level. FU2601 will operate in the range of 2440 - 2480, and LU2602 will operate in the range of 3000 - 3060 [3] - The supply of Asian low - sulfur fuel oil is expected to remain healthy, but it will limit the price increase potential in the short term, especially when the downstream bunker market demand is weak. High - sulfur fuel oil spot demand is mostly still light, mainly supported by regular contract nominations [3] Summary According to the Directory 1. Daily Prompt - Futures prices: The current fuel oil futures prices show a decline. The FU main contract futures price dropped from 2497 to 2451, a decrease of 46 or 1.84%. The LU main contract futures price dropped from 3029 to 2992, a decrease of 37 or 1.22% [5] - Spot prices: The spot prices of various types of fuel oil in different regions have decreased to varying degrees. For example, the price of Zhoushan high - sulfur fuel oil decreased from 437.00 to 431.00, a decrease of 6.00 or 1.37% [6] - Price range: FU2601 is expected to operate in the range of 2440 - 2480, and LU2602 in the range of 3000 - 3060 [3] 2. Multi - and Short - term Concerns - Bullish factors: Russian fuel oil export restrictions and the cancellation of US - Russia talks and sanctions on Russian oil - related enterprises [4] - Bearish factors: The demand side optimism remains to be verified, and the upstream crude oil is under pressure [4] 3. Fundamental Data - Supply and demand: Asian low - sulfur fuel oil supply is expected to be healthy, but short - term price increase potential is limited due to weak downstream demand. High - sulfur fuel oil spot demand is light, mainly supported by contract nominations [3] - Basis: The basis of Singapore high - sulfur fuel oil is - 10 yuan/ton, and that of Singapore low - sulfur fuel oil is 59 yuan/ton, with the spot being nearly flat to the futures [3] - Inventory: Singapore fuel oil inventory in the week of November 19 was 2344.9 million barrels, an increase of 257 million barrels [3][8] - Market trend: The price is below the 20 - day line, and the 20 - day line is downward [3] - Main positions: High - sulfur main positions are short, with short positions decreasing; low - sulfur main positions are long, with long positions decreasing [3] 4. Spread Data - High - and low - sulfur futures spread: The chart shows the spread between high - and low - sulfur futures, but no specific numerical analysis is provided [10] 5. Inventory Data - Singapore fuel oil inventory has changed over time. For example, on September 10, it was 2303.9 million barrels, and on November 19, it was 2344.9 million barrels, with an increase of 257 million barrels compared to the previous period [8]

Report Summary 1. Report Industry Investment Rating - No investment rating provided in the report 2. Core Viewpoints - OPEC and EIA monthly reports have raised oil production forecasts, leading to concerns about supply glut and dragging down oil prices. The marine fuel market has weak supply and demand, with pressure on shipments [3]. - The Asian high - sulfur fuel oil market structure will remain at current levels. Although there is a stable inflow of shipments from the Middle East, healthy downstream marine fuel demand still supports the high - sulfur fuel oil market, and the price spread between high - and low - sulfur fuel oils may narrow in the future. The price of FU2601 is expected to move in the range of 2580 - 2620, and LU2601 in the range of 3180 - 3220 [3]. - The supply side is affected by geopolitical risks, while demand is neutral. The bullish factors include Russia's fuel export restrictions and sanctions on Russian oil - related enterprises, while the bearish factors are the unproven optimistic demand and the pressure on upstream crude oil [4]. 3. Summary by Directory 3.1 Daily Tips - The current situation of fuel oil: The fundamentals are bearish; the basis is neutral; the inventory is neutral; the price on the disk is neutral; the high - sulfur main position is short - biased, and the low - sulfur main position is long - biased [3]. - Futures prices: The FU main contract futures price dropped from 2695 to 2616, a decrease of 2.93%; the LU main contract futures price dropped from 3310 to 3213, also a decrease of 2.93% [5]. - Spot prices: The prices of various types of fuel oil in different regions have generally declined, with the largest decline of 4.09% in Middle East high - sulfur fuel oil, and the price of Singapore diesel increased by 2.04% [6]. 3.2 Multi - and Short - Term Concerns - Bullish factors: Russia's fuel export restrictions and sanctions on Russian oil - related enterprises [4]. - Bearish factors: The optimistic demand on the demand side remains to be verified, and upstream crude oil is under pressure [4]. 3.3 Fundamental Data - Fundamentals: OPEC and EIA monthly reports have raised oil production forecasts, leading to concerns about supply glut and dragging down oil prices. The marine fuel market has weak supply and demand, with pressure on shipments [3]. - Basis: The basis of Singapore high - sulfur fuel oil is - 16 yuan/ton, and that of low - sulfur fuel oil is 36 yuan/ton, with the spot being nearly flat to the futures [3]. - Inventory: Singapore's fuel oil inventory in the week of November 12 was 2087.9 million barrels, a decrease of 19 million barrels [3]. - Disk: The price is below the 20 - day line, and the 20 - day line is flat [3]. - Main positions: The high - sulfur main position is short - biased with an increase in short positions, and the low - sulfur main position is long - biased with a shift from short to long [3]. 3.4 Spread Data - The report shows the historical data of the spread between high - and low - sulfur futures, but specific analysis is not provided [11]. 3.5 Inventory Data - Singapore's fuel oil inventory has fluctuated in recent months. As of November 12, it was 2087.9 million barrels, a decrease of 19 million barrels compared to the previous period [8].

1. Report Industry Investment Rating No information about the report industry investment rating is provided in the content. 2. Core Viewpoints of the Report - High - sulfur fuel oil: The spot market is weak. Although there is some recovery in supply from regions like Mexico and the Middle East, the expected early issuance of new crude oil quotas in 2026 may weaken the fuel - oil feedstock demand. The high - sulfur ship - fuel demand is stable, but the power - generation demand has completely subsided [4][22][25]. - Low - sulfur fuel oil: There are short - term supply shortages due to the unplanned shutdown of the Al - Zour refinery and the upcoming maintenance of the Dangote refinery. In the medium term, there is still supply pressure. The demand has no specific drivers, and the power - generation economy is inferior to that of natural gas [31][34][39]. 3. Summary According to Relevant Catalogs 3.1 Chapter 1: Comprehensive Analysis and Trading Strategies 3.1.1 Comprehensive Analysis - High - sulfur fuel oil: Tok has been buying large quantities of high - sulfur fuel oil at low prices, causing the spot premium to decline continuously. The export logistics of high - sulfur fuel oil in the near term remains relatively stable after the sanctions. The export of high - sulfur fuel oil from Mexico has recovered, and that from the Middle East has increased with the decline in power - generation demand. The expected early issuance of new crude oil quotas in 2026 may lead to a weakening of the fuel - oil feedstock demand [4]. - Low - sulfur fuel oil: The spot premium of low - sulfur fuel oil has rebounded slightly due to supply tightening. There is a short - term supply gap in low - sulfur fuel oil because of the unplanned shutdown and subsequent maintenance of the Al - Zour refinery's residue desulfurization unit. The Dangote refinery's maintenance may affect low - sulfur production, and the fourth - quarter quota for low - sulfur fuel oil has been tightened. The ship - fuel demand is stable without specific drivers [4]. 3.1.2 Strategies - Unilateral: The market is expected to fluctuate with a downward bias, and short - term observation is recommended. - Arbitrage: Take profit on the FU1 - 5 reverse spread. The space for widening the LU01 - FU01 spread is limited. - Options: Observe [5]. 3.2 Chapter 2: Core Logic Analysis 3.2.1 High - Sulfur Fuel Oil - Supply from Russia: Sanctions on Russia continue, and its large - scale export ports and major refineries have been attacked by drones. In October, the export of high - sulfur fuel oil decreased significantly, but the export from the Black Sea port of Tuapse is expected to increase in November [8][9]. - Supply from Mexico: The refining capacity of the Olmeca refinery has changed frequently, and new secondary units of various refineries have been put into operation. The export of high - sulfur fuel oil in October recovered to make up for the supply gap in September [13][14]. - Supply from the Middle East: The export of high - sulfur fuel oil increased after the power - generation demand subsided. The United States continues to impose sanctions on Iran [19][21]. - Demand: The expected early issuance of crude oil quotas may weaken the high - sulfur feedstock demand. The high - sulfur ship - fuel demand is supported stably, and the marginal increase comes from the stable growth in the number of ships equipped with desulfurization towers. The high - sulfur power - generation demand has completely subsided [22][25][28]. 3.2.2 Low - Sulfur Fuel Oil - Supply: The unplanned shutdown of the Al - Zour refinery in the Middle East has led to a short - term supply gap. The Dangote refinery in Nigeria is undergoing unit rotation maintenance, which may affect low - sulfur production. The trade ban between South Sudan and the UAE has changed the low - sulfur logistics pattern [31][34][37]. - Demand: There is no specific driver for demand. The ship - fuel demand is stable, and the power - generation economy is inferior to that of natural gas [39]. - China's low - sulfur market: The quota for bonded low - sulfur exports in the fourth quarter has been tightened. The production of domestic refineries has decreased slightly, and some refineries may be affected by sanctions [42][44]. 3.3 Chapter 3: Weekly Data Tracking - Fuel oil spot: Data on the prices of Brent crude oil, high - sulfur fuel oil, and low - sulfur fuel oil, as well as their spreads with Brent crude oil, are presented [47][49][51]. - High - sulfur fuel oil spreads: Data on cross - regional and cross - period spreads of high - sulfur fuel oil are provided [54]. - Low - sulfur fuel oil spreads: Data on cross - regional and cross - variety spreads of low - sulfur fuel oil are provided [61]. - Natural gas - fuel oil ratio: The equal - calorific - value prices of various fuels and their changes are presented [64]. - Cross - regional freight: Data on cross - regional freight for fuel oil transportation are provided [67]. - Singapore bunker spreads: Data on bunker spreads in Singapore are provided [70]. - Fuel oil inventory structure: Data on fuel oil inventories in Singapore, ARA, Fujairah, Japan, the US, and other regions are presented [73]. - Northwest European inventory structure: Data on gasoline, diesel, and refined - oil inventories in the ARA region are provided [81]. - US Gulf inventory structure: Data on gasoline, diesel, crude - oil, and Cushing crude - oil inventories in the US Gulf region are provided [84]. - Terminal sales structure: In September, the total bunker volume in Singapore decreased slightly. The high - sulfur bunker volume increased year - on - year, while the low - sulfur bunker volume decreased slightly [87][88].

1. Report Industry Investment Rating No information provided. 2. Core Viewpoints of the Report - High - sulfur fuel oil: Supported by feedstock demand in October, with stable high - sulfur cracking and spot premiums. In the future, pay attention to Russia's supply and export under strengthened sanctions and the issuance of crude oil quotas. Feedstock demand may be affected [4][5]. - Low - sulfur fuel oil: Faced with continuous supply pressure in October, with declining spot premiums and cracking. The ARDS device maintenance of Al - Zour refinery brings short - term supply gaps, while the RFCC device maintenance of Dangote refinery is expected to increase supply. Pay attention to refinery device returns and export volume changes [4][5]. - Strategy recommendation: Short - term unilateral trading should be on the sidelines; for arbitrage, short the FU1 - 5 spread on rebounds and go long on low - sulfur internal - external spreads at low levels; no option strategy is recommended [6][59]. 3. Summary by Directory 3.1 First Part: Preface Summary 3.1.1 Market Review - High - sulfur fuel oil: Supported by feedstock demand from the US and China in October, with high - sulfur cracking fluctuating stably between - 4 and - 3 US dollars/barrel. Spot premiums oscillated at a medium - level. Supply from major regions increased slightly [4][10]. - Low - sulfur fuel oil: Suffered from continuous supply pressure in October, with spot premiums dropping by about 2.8 US dollars to - 2.6 US dollars/ton compared to the end of September. Cracking also declined by about 2.9 US dollars to 4.7 US dollars/barrel, at a low - level. There was no specific demand support [4][10]. 3.1.2 Market Outlook - High - sulfur fuel oil: Pay attention to Russia's supply and export under strengthened sanctions, which are expected to be less affected. The expected issuance of crude oil quotas may impact feedstock demand [5]. - Low - sulfur fuel oil: The ARDS device maintenance of Al - Zour refinery brings short - term supply gaps, while the RFCC device maintenance of Dangote refinery is expected to increase supply. Pay attention to refinery device returns and export volume changes [5]. 3.1.3 Strategy Recommendation - Unilateral: Short - term wait - and - see. - Arbitrage: Short the FU1 - 5 spread on rebounds. Go long on low - sulfur internal - external spreads at low levels. - Options: None [6] 3.2 Second Part: Fundamental Situation 3.2.1 Market Review - High - sulfur fuel oil: Supported by feedstock demand, cracking was stable. Supply from major regions increased, including Russia, Mexico, and the Middle East. Spot premiums were at a medium - level [10]. - Low - sulfur fuel oil: Supply pressure continued, with declining spot premiums and cracking. Dangote and Malay local refineries' device maintenance increased supply in the Singapore region, and there was no specific demand support [10]. 3.2.2 High - Sulfur Supply - Russia: Facing continuous attacks on energy facilities and intensified sanctions from the US, UK, and EU. Pay attention to supply and logistics changes after sanctions. Before sanctions, raw material exports increased, and exports in October were relatively stable [15][17]. - Mexico: Tula refinery's coking device reduced fuel oil production. Olmeca refinery's high - sulfur production is expected to decrease gradually. High - sulfur exports in October recovered to about 500,000 tons [20]. - Middle East: High - sulfur exports increased slightly after the decline in power - generation demand. In October, daily exports were about 150,000 tons, up 2% from September [25]. 3.2.3 High - Sulfur Demand - Marine fuel demand: Stable support, with marginal growth from the increasing number of desulfurization tower ships. In September 2025, high - sulfur marine fuel consumption in Singapore and Fujeirah increased [34]. - Feedstock demand: Supported in the short - term by the crude oil quota gap in the fourth quarter. Pay attention to the re - issuance of crude oil quotas and the impact of sanctions. China's fuel oil imports increased in September [37][39]. - Power - generation demand: Completely subsided in Egypt and the Middle East [41]. 3.2.4 Low - Sulfur Fuel Oil - South Sudan: Due to the trade ban between the UAE and Sudan, low - sulfur export logistics changed, with crude oil diverted to the Singapore region. The external tender volume did not decrease significantly [44]. - Al - Zour refinery: Production decreased in October, and the restart of desulfurization devices may be delayed. Exports increased in October, and the 2026 maintenance plan was postponed [47]. - Dangote refinery: The gasoline device resumed production at a 60% operating rate in October. Two batches of low - sulfur straight - run products were tendered during the device shutdown. Exports decreased slightly in October [48]. - China: The fourth - quarter bonded low - sulfur production is expected to decline slightly. Sinopec and PetroChina have sufficient quotas, while CNOOC is short of quotas. Sanctions may affect the production of some refineries [49][51]. 3.3 Third Part: Future Outlook and Strategy Recommendation - High - sulfur fuel oil: Pay attention to supply logistics changes after sanctions. Exports from Mexico and the Middle East are stable. Feedstock demand is supported in the short - term [59]. - Low - sulfur fuel oil: Spot premiums are oscillating at a low level. The low - sulfur production of Al - Zour refinery is affected. EU sanctions have little impact on domestic supply. Nigerian RFCC devices are running at a low load, and South Sudan's low - sulfur raw material logistics are changing. Marine fuel demand is stable [59]. - Strategy recommendation: Short - term unilateral trading should be on the sidelines; for arbitrage, short the FU1 - 5 spread on rebounds and go long on low - sulfur internal - external spreads at low levels; no option strategy is recommended [59].

1. Report Industry Investment Rating No information provided. 2. Core Viewpoints of the Report - High - sulfur and low - sulfur fuel oils are both in a weak oscillation state, and the idea is to short on rebounds. Do not short high - sulfur cracking in the short term as it is supported by feedstock demand. Take profit on the FU1 - 5 backwardation spread. Adopt a wait - and - see approach for options [6]. 3. Summary by Relevant Catalogs 3.1 Comprehensive Analysis and Trading Strategies - **Supply and Demand Analysis** - High - sulfur: Russian fuel oil exports increase despite energy facility attacks. Middle - East high - sulfur exports rise after the decline in power - generation demand, while Mexican high - sulfur exports are at a low level. The summer power - generation demand has completely subsided, but there is support for high - sulfur feedstock demand in the fourth quarter due to the approaching exhaustion of domestic refineries' crude oil quotas [4]. - Low - sulfur: There are medium - term disturbances in supply factors, but the near - end spot market remains weak with continuous decline in spot premiums. Nigerian RFCC device operation is unstable. There is an expected increase in the logistics of low - sulfur heavy - grade raw materials to the Pan - Singapore region. The Al - Zour refinery is expected to undergo maintenance in the first quarter of next year. In the Chinese market, Sinopec and PetroChina are expected to have sufficient quotas in the fourth quarter without increasing production, while CNOOC is expected to face quota shortages. Ship - fuel demand is stable without specific drivers [4]. - **Trading Strategies** - Unilateral: Short on rebounds for both high - sulfur and low - sulfur fuel oils. - Arbitrage: Do not short high - sulfur cracking in the short term. Take profit on the FU1 - 5 backwardation spread. - Options: Wait - and - see [6]. 3.2 Core Logic Analysis - **Supply - Side Analysis** - **Russia**: Despite continuous attacks on energy facilities, fuel oil exports increase. As of October 12, the four - week average of Russian port crude oil exports reached 3.74 million barrels per day, the highest since June 2023. In September, fuel oil exports reached a record high of 3.08 million tons, a month - on - month increase of 0.68 million tons (+28%). In contrast, refined - oil exports decreased. Some refineries have been attacked, affecting their processing capacity [9][10]. - **Mexico**: The Tula coking unit has been put into operation, increasing crude oil processing volume. The Olmeca refinery has been frequently adjusted and maintained in recent months, with expected increases in refined - oil output and a gradual reduction in high - sulfur output. In September, high - sulfur exports further declined to a record low of 330,000 tons, a month - on - month decrease of 190,000 tons (-36%) [15]. - **Middle East**: The US sanctions on Iran continue. As of October 17, exports were about 2.25 million tons, with a daily average of about 140,000 tons, similar to the September level. After the peak power - generation demand in the Middle East subsided, high - sulfur exports began to rise in July, reaching a peak of 5.26 million tons in August [20]. - **Demand - Side Analysis** - **High - sulfur**: Ship - fuel demand is stably supported, with the marginal increase coming from the stable growth in the number of desulfurization - tower - equipped ships. Power - generation demand has completely subsided, with a significant decline in imports in Egypt and Saudi Arabia. In the fourth quarter, there is support for high - sulfur feedstock demand due to the approaching exhaustion of domestic refineries' crude oil quotas [24][27][32]. - **Low - sulfur**: There are disturbances in supply factors, and the near - end spot market is weak. Ship - fuel demand is stable without specific drivers [4]. 3.3 Weekly Data Tracking - **Price and Spread Data** - Fuel oil spot prices, including Brent crude oil, HSFO380, LSFO, etc., are presented, along with various spreads such as HSFO380 - Brent, LSFO - GO, etc. [54][55][57][58][68] - High - sulfur fuel oil cross - region and cross - period spreads, and low - sulfur fuel oil cross - region and cross - variety spreads are also provided [60][67]. - **Inventory Data** - Inventory data for fuel oil in Singapore, ARA, Fujairah, Japan, the US, etc., are presented, along with inventory data for gasoline, diesel, and refined oil in Northwest Europe and the US Gulf [80][87][90]. - **Terminal Sales Data** - In September, Singapore's ship - fuel bunkering totaled 4.765 million tons, with high - sulfur ship - fuel bunkering at 1.916 million tons and low - sulfur ship - fuel bunkering at 2.422 million tons [93].

Report Industry Investment Rating - High-sulfur fuel oil: Cautiously bearish, short-term focus on the progress of China-US tariff negotiations [7] - Low-sulfur fuel oil: Cautiously bearish, short-term focus on the progress of China-US tariff negotiations [7] - Cross-variety: None [7] - Cross-period: None [7] - Spot-futures: None [7] - Options: None [7] Core Viewpoints - The fuel oil futures market is under pressure as the peak season ends, the crude oil fundamentals weaken, and macro risks increase. Both high-sulfur and low-sulfur fuel oil face challenges in supply, demand, and market structure [1]. - The supply of high-sulfur fuel oil may increase due to the easing of the Middle East situation and the release of OPEC's production capacity, while the supply of low-sulfur fuel oil has seen a recent increase but is expected to ease [2][3]. - The demand for fuel oil is affected by factors such as China-US trade frictions, the replacement of low-sulfur fuel oil in the marine fuel market, and the decline in power generation demand after summer [4]. - The inventory of fuel oil has increased in some regions, and the market structure of high-sulfur fuel oil has strengthened marginally, while that of low-sulfur fuel oil has weakened [5][6]. Summary by Relevant Catalogs Market Performance - This week, the fuel oil futures market declined. The FU main contract fell 5.54%, and the LU main contract dropped 7.13% [1]. Supply High-sulfur Fuel Oil - The Middle East situation has eased, and OPEC's relaxation of production cuts may increase the supply of high-sulfur fuel oil. Middle East's September high-sulfur fuel oil shipments are expected to be 4.41 million tons, and October's are estimated at 3.72 million tons [2]. - Iran's September shipments are expected to be 1.45 million tons, and October's are estimated at 0.57 million tons. The US sanctions on Iran continue to increase the difficulty of its oil trade [2]. - Russia's high-sulfur fuel oil supply decreased in August due to refinery maintenance but rebounded in September. September's shipments are expected to be 2.97 million tons, and October's are estimated at 1.97 million tons [2]. Low-sulfur Fuel Oil - There has been a recent increase in local supply, mainly from Nigeria's temporary increase. Nigeria's September low-sulfur fuel oil shipments are expected to be 0.53 million tons, and October's are estimated at 0.34 million tons [3]. - Kuwait's exports are relatively limited. September's shipments are 0.37 million tons, and October's are expected to be 0.4 million tons [3]. - China's domestic production of low-sulfur fuel oil has been low this year due to poor profitability and refinery maintenance. September's production was 1.075 million tons, a 0.94% increase from the previous month [3]. Demand - China-US trade frictions and potential tariff increases may damage trade and shipping demand, affecting the consumption of marine fuel oil. There may be a short-term increase in exports due to the anticipation of tariffs [4]. - The demand for low-sulfur fuel oil in the marine fuel market is being replaced by new desulfurization towers and cleaner energy sources such as LNG and green methanol [4]. - After the summer, the power generation demand in the Middle East, South Asia, and Egypt will decline, reducing the consumption of high-sulfur fuel oil. However, Egypt's demand may increase due to the decline in domestic natural gas production [4]. - The demand from refineries has shown a marginal increase. China's high-sulfur fuel oil imports in September are expected to be 0.5 million tons, and October's arrivals are estimated at 0.84 million tons [4]. Inventory - This week, Singapore's fuel oil inventory was 25.063 million barrels, a 5.89% increase from the previous week, and Zhoushan Port's inventory was 1.35 million tons, a 21.62% increase [5]. Market Structure High-sulfur Fuel Oil - The market structure has strengthened marginally due to reduced supply pressure, improved refinery demand, and a decrease in domestic futures registered warehouse receipts [5]. - However, the upward momentum may be limited due to the decline in power generation demand after summer, potential increases in Middle East exports, and potential risks in shipping demand [5]. Low-sulfur Fuel Oil - The market structure has weakened recently due to increased local supply and average marine fuel demand [6]. - If the Dangote refinery resumes operation, the supply may decrease. However, if China-US tariff conflicts intensify, the shipping demand will be affected, and the low-sulfur fuel oil market may be more sensitive [6]. - The demand for low-sulfur fuel oil is under continuous downward pressure due to the trend of carbon neutrality in the shipping industry. If the trade risks ease, the downside space may be limited based on its relatively low valuation compared to gasoline and diesel [6].

1. Report Industry Investment Rating - No information provided in the given content. 2. Core Viewpoints of the Report - The high - sulfur fuel oil market remains generally loose in supply and demand, with high inventories suppressing prices. The low - sulfur fuel oil supply is increasing, and downstream demand lacks specific drivers, but the supply pressure in the fourth quarter is less than expected [4][9][60]. - For trading strategies, it is recommended to expect the FU main contract to be in a short - term strong - side volatile state, the LU near - month contract to fluctuate within a range following crude oil, pay attention to the opportunity of expanding the spread between LU01 and FU01, and sell out - of - the - money call options of FU01 [5][60][61]. 3. Summary by Relevant Catalogs 3.1 First Part: Preface Summary 3.1.1 Market Review - In September, the high - sulfur fuel oil had positive drivers on both the supply and demand sides, with the high - sulfur crack steadily rising by about $1.8 per barrel to around - $3.2 per barrel. The low - sulfur fuel oil fluctuated weakly. The RFCC unit of Nigeria's Dangote refinery malfunctioned again at the end of August, increasing the near - term supply pressure of low - sulfur fuel oil [3][9]. 3.1.2 Market Outlook - The high - sulfur fuel oil exports from Russia are relatively stable, and the inventories in Singapore and China are still high. The expected increase in feedstock demand is not enough to quickly digest the existing inventories, so the overall supply - demand in the fuel oil market remains loose. The supply pressure of low - sulfur fuel oil in the fourth quarter is less than expected, with the Nigerian RFCC unit expected to return early and some refineries in China still restricted in supply [4]. 3.1.3 Strategy Recommendation - Unilateral: Expect a volatile market. - Arbitrage: Pay attention to the opportunity of expanding LU01 - FU01. - Options: Sell out - of - the - money call options of FU01 [5]. 3.2 Second Part: Fundamental Situation 3.2.1 Market Review - Similar to the preface summary, in September, the high - sulfur fuel oil had positive drivers on both supply and demand sides, but high inventories restricted the market. The low - sulfur fuel oil was weakly volatile, with increased near - term supply pressure and relatively abundant low - sulfur component supply [9]. 3.2.2 Supply Overview - **High - sulfur fuel oil supply**: - Russia: Despite continuous attacks on energy facilities, the recovery is fast, and fuel oil exports have increased. For example, in August, Russia's seaborne petroleum product exports increased by 8.9% month - on - month, and in September, the fuel oil flow increased by 22% month - on - month [18][20]. - Mexico: High - sulfur exports are continuously falling due to the commissioning of secondary units in Olmeca and Tula refineries [22]. - Middle East: High - sulfur exports have increased after the peak power - generation demand season. In August, high - sulfur exports reached the highest level this year, but Iran's exports are still restricted [26]. - **Low - sulfur fuel oil supply**: - Nigeria: The RFCC unit of Dangote refinery is still unstable in operation, and low - sulfur exports are increasing. The Harcourt refinery has been closed for two consecutive months, and the Warri refinery has no crude oil quota [45][47]. - Middle East: The Al - Zour refinery maintains high - level low - sulfur exports under stable operation. South Sudan's low - sulfur heavy feedstock exports to the Pan - Singapore region are expected to increase due to the conflict with the UAE [47][48]. - China: The third batch of low - sulfur fuel oil quotas has been issued, and the overall market supply is relatively abundant [50]. 3.2.3 Demand Overview - **High - sulfur fuel oil demand**: - Marine fuel bunkering demand: It provides stable support. As of mid - September 2025, the number of ships equipped with desulfurization towers has increased. In August 2025, high - sulfur marine fuel bunkering in Singapore decreased slightly month - on - month but was still at a high year - on - year level [34]. - Feedstock demand: Supported by the low cost of high - sulfur cracking decline and tax reform, but the support is not obvious. Import demand has been low since July and August [37][39]. - Power - generation demand: It has completely subsided. In Egypt and the Middle East, high - sulfur power - generation demand has decreased significantly [41][43]. - **Low - sulfur fuel oil demand**: - Marine fuel bunkering demand: It is stable without specific drivers. In August 2025, low - sulfur marine fuel bunkering in Singapore increased slightly month - on - month [49]. 3.2.4 Inventory and Valuation - No specific content provided in the given materials. 3.3 Third Part: Future Outlook and Strategy Recommendation - **Future Outlook**: - High - sulfur fuel oil: Supply from Russia, the Middle East, and Mexico shows different trends. Demand from power - generation has disappeared, and feedstock demand support is weak. High - level inventories suppress prices, and attention should be paid to new warrant generation and inventory digestion [60]. - Low - sulfur fuel oil: The spot window transaction price is low, and the supply continues to increase. The conflict between South Sudan and the UAE may change the logistics of low - sulfur heavy feedstock, and the Nigerian RFCC unit's operation is unstable. The overall supply in the Chinese market is abundant [60]. - **Strategy Recommendation**: - Unilateral: The FU main contract is expected to be strongly volatile in the short term, and the LU near - month contract will fluctuate within a range following crude oil. - Arbitrage: Pay attention to the opportunity of expanding the spread between LU01 and FU01. - Options: Sell out - of - the - money call options of FU01 [60][61].

Report Summary 1. Report Industry Investment Rating No specific investment rating for the industry is provided in the report. 2. Core Viewpoints - The Asian low - sulfur fuel oil market is facing a supply surplus with no sign of tightening recently, leading to a narrowing of the spot price spread between low - sulfur and high - sulfur fuel oil in Singapore [3]. - The Russian fuel oil export ban may be extended, increasing the expectation of tight supply in the high - sulfur fuel oil market. Overnight, high - sulfur fuel oil was significantly stronger than crude oil and low - sulfur fuel oil under the background of rising oil prices. However, the Russian side has not confirmed it yet, and investors should control their positions and be cautious about chasing long positions [3]. - The price of FU2601 is expected to run in the range of 2840 - 2900, and LU2511 is expected to run in the range of 3380 - 3420 [3]. 3. Summary by Directory 3.1 Daily Tips - The fundamentals of the fuel oil market are as follows: the Asian low - sulfur fuel oil market has a supply surplus (neutral); the spot price is at a premium to the futures price (positive); the Singapore fuel oil inventory increased by 120,000 barrels to 23.159 million barrels in the week of September 17 (neutral); the price is above the 20 - day line with the 20 - day line being flat (neutral); the high - sulfur main position is short and the short position is decreasing (negative), while the low - sulfur main position is long and the long position is decreasing (positive) [3]. - The expected price ranges are FU2601: 2840 - 2900, LU2511: 3380 - 3420 [3]. 3.2 Multi - Air Concerns - The market is driven by the resonance of supply affected by geopolitical risks and neutral demand. The risk points include the potential damage to OPEC+ internal unity and the escalation of war risks. The bullish factors are the possible extension of Russian fuel oil export restrictions, and the bearish factor is the possible intensification of sanctions against Russia [4]. 3.3 Fundamental Data - Fundamental aspects: Supply in the Asian low - sulfur fuel oil market is in surplus, and the price spread between low - sulfur and high - sulfur fuel oil in Singapore has narrowed [3]. - Basis: The basis of Singapore high - sulfur fuel oil is $127 per ton, and that of low - sulfur fuel oil is $55 per ton, with the spot price at a premium to the futures price [3]. - Inventory: Singapore's fuel oil inventory in the week of September 17 was 23.159 million barrels, an increase of 120,000 barrels [3]. - Disk: The price is above the 20 - day line, and the 20 - day line is flat [3]. - Main Position: High - sulfur main position is short and the short position is decreasing; low - sulfur main position is long and the long position is decreasing [3]. 3.4 Spread Data No specific content related to spread data analysis is provided other than the narrowing of the spot price spread between low - sulfur and high - sulfur fuel oil in Singapore [3]. 3.5 Inventory Data - Singapore fuel oil inventory data from July 9 to September 17 shows fluctuations. In the week of September 17, the inventory was 23.159 million barrels, an increase of 120,000 barrels from the previous week [3][8].