Fuel Oil Market Dynamics Report (Recent Commodity Market Intelligence)

I. Price Trends
- Spot Prices:
- On May 21, 2026, the reference price for fuel oil stood at RMB 6,050.00 per metric ton, down 1.02% from RMB 6,112.50 per metric ton on May 1.
- On May 18, the reference price was RMB 6,000.00 per metric ton, down 1.84% from May 1.
- On May 8, the reference price was RMB 5,962.50 per metric ton, down 2.45% from May 1.
- On April 27, the reference price was RMB 6,100.00 per metric ton, down 7.75% from RMB 6,612.50 per metric ton on April 1.

- Futures Prices:
- On May 21, 2026, the closing price of the front-month fuel oil futures contract was RMB 4,154.00 per metric ton, up 0.83% from the previous trading day.
- On May 8, the closing price of the front-month fuel oil futures contract was RMB 4,321.00 per metric ton, up 2.18% from the previous trading day.

II. Regional Market Quotations
- Shanghai Region:
- China National Offshore Oil Corporation (CNOOC) 180 CST fuel oil: RMB 5,950 per metric ton.
- CNOOC 120 CST fuel oil: RMB 6,050 per metric ton.

- Other Regions:
- Ningbo, Zhoushan, and Zhuhai: CNOOC 180 CST fuel oil quoted at RMB 5,800 per metric ton.
- Qingdao: CNOOC 180 CST fuel oil quoted at RMB 6,650 per metric ton.
- Zhanjiang and Guangzhou: CNOOC 180 CST fuel oil quoted at RMB 5,700 per metric ton.
- Dalian: CNOOC 180 CST fuel oil quoted at RMB 6,250 per metric ton.
- Tianjin and Caofeidian (Tangshan): CNOOC 180 CST fuel oil quoted at RMB 6,400 per metric ton.

III. Supply and Demand Dynamics
- Supply Side:
- Singapore Market: Low-sulfur fuel oil arrivals from Western markets declined by approximately 400,000 metric tons in April; high-sulfur fuel oil supply tightened due to Middle East conflicts, though supplies from Russia and Venezuela partially alleviated the shortage.
- Global Market: OPEC+ signals of increased production and easing geopolitical tensions have raised expectations for higher crude oil supply; however, Ukrainian strikes against Russian oil infrastructure may disrupt high-sulfur fuel oil supply in May.

- Demand Side:
- Shipping Industry: Total marine fuel sales in Singapore rose 1.94% month-on-month and 6.62% year-on-year in March, but demand softened in April amid buyer caution.
- Industrial Production: Steady global economic recovery has boosted industrial output and transportation demand; however, seasonal weather impacts—such as northern heatwaves and southern heavy rainfall—may suppress some demand.

IV. Inventory Status
- Singapore fuel oil inventories fluctuated within a range of 21.72–23.67 million barrels in April. As of the week ending April 22, inventories stood at 22.50 million barrels, down 8.2% week-on-week and down 6.75% year-on-year.

V. Related Market Developments
- Crude Oil Market:
- Easing geopolitical tensions and OPEC+ production-increase signals have contributed to lower oil prices; however, persistent Middle East conflicts and Ukrainian attacks on Russian oil infrastructure may exert upward pressure on prices.
- The European Commission revised its 2026 eurozone inflation forecast upward to 3.0% and lowered its GDP growth forecast to 0.9%, reflecting mounting economic pressures that could dampen energy demand.

- Policy Impacts:
- Iran has called on its citizens to conserve energy—including electricity, natural gas, and fuel—which may affect its fuel oil export volumes.
- Tightening environmental regulations are likely to reduce fuel oil demand, particularly for high-sulfur fuel oil.

Analysis & Assessment
1. Price Volatility Drivers:
- Fuel oil prices are influenced by multiple factors, including crude oil prices, geopolitical risks, supply-demand dynamics, and policy changes.
- Recent price fluctuations stem primarily from alternating phases of geopolitical de-escalation and escalation, as well as contradictory signals—OPEC+ production increases versus ongoing Ukrainian strikes on Russian oil infrastructure.

2. Supply-Demand Balance:
- Supply Side: Global fuel oil supply remains volatile due to geopolitical risks and variations in refinery utilization rates. Low-sulfur fuel oil supply in Singapore is tightening, while high-sulfur fuel oil supply is partially stabilized by alternative sources (e.g., Russia and Venezuela).
- Demand Side: Shipping demand shows modest growth, whereas industrial demand may fluctuate due to seasonal weather conditions and macroeconomic developments.

3. Inventory Impact:
- Singapore fuel oil inventories have trended downward with oscillation, indicating tightening supply; however, relatively weak downstream marine fuel demand may constrain significant price gains.

Outlook
1. Price Trend:
- In the short term, fuel oil prices are likely to remain volatile, driven by geopolitical risks and crude oil price fluctuations.
- Should Middle East tensions ease, oil prices may decline, pulling fuel oil prices lower; conversely, escalation of regional conflict or sustained Ukrainian attacks could push oil prices—and consequently fuel oil prices—higher.

2. Supply-Demand Evolution:
- Supply Side: Low-sulfur fuel oil arrivals from Western markets may further decline in May; high-sulfur fuel oil supply is expected to remain partially stable thanks to continued flows from Russia and Venezuela, although overall supply remains constrained.
- Demand Side: Shipping demand is anticipated to maintain steady growth, while industrial demand may fluctuate depending on seasonal weather and broader economic conditions.

3. Market Risks:
- Key risk factors for the fuel oil market include geopolitical uncertainty, crude oil price volatility, evolving environmental policies, and global macroeconomic uncertainty.