Report Industry Investment Rating - Not provided in the content Core Viewpoints - High sulfur fuel oil is suppressed by abundant spot supplies in the near - term, while low sulfur fuel oil shows a volatile trend [1] - For trading strategies, it is advisable to take a wait - and - see approach for both unilateral and arbitrage trades, and pay attention to geopolitical and macro - level disturbances as well as the digestion of near - term high sulfur spot [5] Summary by Directory Chapter 1: Comprehensive Analysis and Trading Strategies Comprehensive Analysis - High sulfur: The number of buyers in the high sulfur spot window has increased, and low - price transactions have hit the high sulfur spot premium, which has fallen below zero. High inventories in Singapore and increased near - term domestic spot arrivals have pressured prices. Russian supply is expected to recover in July, but there are still risks due to the Ukraine - Russia conflict. High sulfur seasonal power generation demand remains supportive in the third quarter, with strong demand in Egypt and Saudi Arabia. There are expectations of an increase in China's fuel oil consumption tax deduction, which may boost feed demand [4] - Low sulfur: The low sulfur fuel oil spot premium is volatile. Supply is continuously increasing, and downstream demand lacks specific drivers. Supply from Nigeria, South Sudan, and Al - Zour refinery is increasing, and China's low sulfur production is expected to grow in June, with sufficient supply and stable demand [4] Strategies - Unilateral: Wait and see, and pay attention to geopolitical and macro - level disturbances [5] - Arbitrage: Wait and see, and pay attention to the digestion of near - term high sulfur spot [5] - Options: No specific view [5] Chapter 2: Core Logic Analysis Supply - related - Russia: Off - line refining capacity is expected to decrease in July. Exports of high sulfur fuel oil have started to recover in the past two weeks. The EU plans to intensify sanctions, including lowering the oil price cap [7] - Mexico: The supply of high sulfur fuel oil has fallen to the level before the Olmeca refinery's production. The Olmeca refinery's operation is improving, and other refineries' processing volumes have changed. High sulfur exports in June were at a low level but showed a rebound in the first week of July [10] - Middle East: The sentiment of the Iran - Israel conflict has subsided, but the US sanctions on Iran continue. Summer power generation demand in Saudi Arabia and Iran may divert supply. High sulfur exports in June were at a low level [15] Demand - related - High sulfur power generation: Egypt's high sulfur fuel oil procurement is strong due to summer power generation demand. South Asia's power generation demand is near the end, and the Middle East's power generation demand is expected to remain strong in July [16] - China's demand: The expected increase in the fuel oil consumption tax deduction ratio may support feed demand. China's high sulfur fuel oil imports rebounded in June [22] - High sulfur marine fuel: Demand is stably supported, and the marginal increase comes from the stable growth of the number of ships with desulfurization towers [23] Low sulfur fuel oil - South Sudan: The supply of low - sulfur heavy raw material Dar Blend is steadily recovering, with multiple export tenders [26] - Al - Zour refinery: Low - sulfur exports are expected to remain at a high level, and supply to the pan - Singapore area has increased [27] - Nigeria: Near - term low - sulfur supply is abundant, mainly flowing to Singapore. The Dangote refinery's FCC gasoline unit is still unstable [30] - China: The domestic low - sulfur market has stable production, and the third - batch export quota is expected to be issued soon, with sufficient quotas [38] Chapter 3: Weekly Data Tracking - Fuel oil spot: Data on the prices of Brent, HSFO380, LSFO, etc., and their spreads are presented [40] - High sulfur fuel oil spreads: Data on cross - regional and cross - term spreads, and spot premiums are provided [47] - Low sulfur fuel oil spreads: Data on cross - regional and cross - variety spreads, and spot premiums are provided [53] - Gasoline - fuel oil ratio: Data on the equivalent - calorific - value prices of different fuels are presented [60] - Cross - regional freight: Data on freight rates from different regions are provided [62] - Singapore filling spreads: Data on high - sulfur and low - sulfur filling spreads in Singapore are presented [65] - Fuel oil inventory: Data on fuel oil inventories in Singapore, ARA, US, etc., and the total inventory of five countries are provided [68] - Inventory structure in different regions: Data on gasoline, diesel, and refined oil inventories in Northwest Europe and the US Gulf are provided [70][72] - Terminal sales: Singapore's marine fuel sales data for May are announced, including high - sulfur and low - sulfur sales volumes and their proportions [74]