CITIC Futures: Low-sulfur fuel oil follows crude oil in high volatility, with the current market focusing on geopolitical developments

Low sulfur fuel follows crude oil high fluctuations, with the current market focusing on geopolitical developments; low sulfur fuel has strong main product attributes, and during this round of oil price increases, the valuation of low sulfur fuel has significantly recovered compared to crude oil and asphalt, with profits greatly revised upward. A positive diesel-gasoline price spread may indicate that low sulfur fuel follows gasoline fluctuations. Low sulfur fuel faces bearish factors such as declining shipping demand, green energy replacements, and high sulfur substitutes. Its main product attributes cause the crack spread of low sulfur fuel to strengthen during crude oil rises; on the fundamentals side, the export rebate rate for low sulfur fuel has an advantage over refined oil, and the impact of export quotas for low sulfur fuel is minimal. The expectation of high profits may drive an increase in low sulfur fuel production. (CITIC Futures)