Spurred by rising global crude oil prices, Shanghai fuel oil
futures yesterday surged 4.4 percent, the biggest one-day increase
since early 2006, reaching the highest level since the contracts
began trading in 2004.
The most actively traded fuel oil futures contracts for March
delivery on the Shanghai Futures Exchange (SHFE), touched a record
high of 4,275 yuan per ton before closing at 4,172 yuan, up 4.40
percent from the previous day. The contract price has surged an
aggregate 6.3 percent since last Thursday.
Analysts said anticipation of further crude oil price rises in
the global market largely pushed up fuel oil prices in the domestic
market.
"Shanghai fuel oil futures are expected to closely follow the
global market uptrend of crude oil prices, which is likely to break
the $100-point psychological barrier very soon," Li Jingyuan, an
analyst at Haifu Futures Co, said.
On the New York Mercantile Exchange (NYME), the most actively
traded crude oil futures contracts for January delivery rose 0.63
percent to $98.8 per barrel. The contract price has increased a
total of 5.2 percent in the past two weeks.
Rising concern about a potential supply shortage of processed
oil products in the domestic markets also intensified the price
surge of fuel oil futures.
Recent figures show China's output of crude oil increased 1.9
percent to 15.8 million tons in October, while the yield of refined
oil products totaled 16.3 million tons, up 5.7 percent from the
year earlier period. Nominal consumption- domestic crude output
plus net import of refined oil products - saw an even bigger
increase in October, surging 6.1 percent from the earlier year
period, to 29 million tons.
Lin Hui, an analyst at Orient Securities Futures, said the gap
between spot and futures prices also helped drive fuel oil futures
prices.
"Rapidly rising spot prices call for the corresponding price
increase in the futures market to narrow the price spread between
the two markets," Lin said.
The spot price of fuel oil quoted at Huangpu seaport in
Guangdong province, which handles over 90 percent of the imports,
yesterday reached 4,400 yuan per ton, while in the Singapore spot
market, fuel oil prices recently hovered above $490 per ton.
Statistics released last Thursday by the Ministry of Commerce
showed the aggregate net import of refined oil products reached
13.2 million tons, up 11.6 percent.
China's import of crude oil in the first ten months totaled 136
million tons.
(China Daily November 27, 2007)
