Report Investment Rating - High-sulfur fuel oil: Short-term neutral, medium-term downward [3] - Low-sulfur fuel oil: Short-term neutral, medium-term downward [3] - Cross-variety: None [3] - Cross-period: None [3] - Spot-futures: None [3] - Options: None [3] Core Viewpoints - The main contract of SHFE fuel oil futures closed up 2.41% at 2,799 yuan/ton, and the main contract of INE low-sulfur fuel oil futures closed up 2.65% at 3,375 yuan/ton [1] - Crude oil prices are in a range-bound oscillation. With the peak of refinery autumn maintenance approaching, demand will decline seasonally. Under the trend of continuous OPEC production increase, the crude oil balance sheet is expected to gradually loosen. However, due to geopolitical uncertainties and low actual inventories, the short-term direction of oil prices is unclear, providing limited guidance for fuel oil prices [1] - High-sulfur fuel oil is in the market rebalancing stage, with both long and short factors intertwined. Near-term supply is relatively abundant, and Singapore's inventory is at a high level. As summer ends, fuel oil demand in the Middle East and other regions is expected to gradually decline, and high-sulfur fuel oil exports still have room for growth. On the positive side, Russian and Iranian supplies are affected by drone attacks and sanctions respectively, and Middle East fuel oil shipments in September have also significantly declined. Overall, short-term market contradictions for high-sulfur fuel oil are limited. If refinery demand improves significantly, the market will receive new support [1] - For low-sulfur fuel oil, the recent shutdown of the RFCC unit at Nigeria's Dangote refinery has increased low-sulfur fuel oil exports, increasing market supply pressure. However, the volume of arbitrage cargoes from the Western region has declined, and there is no expectation of serious oversupply. In the medium term, low-sulfur fuel oil still faces the contradiction of demand share being replaced and having more surplus capacity. Therefore, while there is some support below the valuation, the upward resistance is also large [2] Directory Summaries Market Analysis - The main contract of SHFE fuel oil futures closed up 2.41% at 2,799 yuan/ton, and the main contract of INE low-sulfur fuel oil futures closed up 2.65% at 3,375 yuan/ton [1] - Crude oil prices are in a range-bound oscillation. With the peak of refinery autumn maintenance approaching, demand will decline seasonally. Under the trend of continuous OPEC production increase, the crude oil balance sheet is expected to gradually loosen. However, due to geopolitical uncertainties and low actual inventories, the short-term direction of oil prices is unclear, providing limited guidance for fuel oil prices [1] - High-sulfur fuel oil is in the market rebalancing stage, with both long and short factors intertwined. Near-term supply is relatively abundant, and Singapore's inventory is at a high level. As summer ends, fuel oil demand in the Middle East and other regions is expected to gradually decline, and high-sulfur fuel oil exports still have room for growth. On the positive side, Russian and Iranian supplies are affected by drone attacks and sanctions respectively, and Middle East fuel oil shipments in September have also significantly declined. Overall, short-term market contradictions for high-sulfur fuel oil are limited. If refinery demand improves significantly, the market will receive new support [1] - For low-sulfur fuel oil, the recent shutdown of the RFCC unit at Nigeria's Dangote refinery has increased low-sulfur fuel oil exports, increasing market supply pressure. However, the volume of arbitrage cargoes from the Western region has declined, and there is no expectation of serious oversupply. In the medium term, low-sulfur fuel oil still faces the contradiction of demand share being replaced and having more surplus capacity. Therefore, while there is some support below the valuation, the upward resistance is also large [2] Strategy - High-sulfur: Short-term neutral, medium-term downward [3] - Low-sulfur: Short-term neutral, medium-term downward [3] - Cross-variety: None [3] - Cross-period: None [3] - Spot-futures: None [3] - Options: None [3]