Fuel oil futures traded on the Shanghai Futures Exchange, or
SHFE, rose 1.07 percent to a record high, driven largely by the
continuing surge in crude oil prices over the past few weeks.
The price of the most actively traded fuel oil futures contracts
for delivery in January 2008 jumped 40 yuan per ton to close at
3,795 yuan yesterday.
The price of the most actively traded crude oil futures contract
on the New York Mercantile Exchange, NYMEX, surged 1.14 percent to
a record high of $87.55 a barrel in electronic trading in New
York.
It is widely expected by analysts that crude oil futures will
continue the upward trend, as tensions on the Turkey-Iraq border is
intensifying, raising concerns that supplies could be interrupted
as global inventories decline.
Analysts said fuel oil futures in the domestic market would
continue the upward trend in tandem with crude prices.
"The domestic spot and futures markets in fuel oil are closely
in sync with the international market trend," said Lin Hui, an
analyst at a futures company of Orient Securities. "The fuel
oil futures in China is expected to continue the upward spiral in
the upcoming weeks, as the price increase in the global market
would not change in the next several weeks," she added.
Together with gas oil, diesel, and kerosene, fuel oil is one of
the four major products processed from crude oil. Currently,
China's imported fuel oil amounts to 50 percent of its total
demand. Among the total fuel oil imported, 80 percent comes from
refineries in South Korea, Singapore, and Russia.
EIA, the US Energy Information Administration, reported last
week the nation's crude oil stockpile had dropped 9.8 percent, or
14 million barrels from a year earlier period.
According to a report released by the Organization of Petroleum
Exporting Countries, OPEC, this Monday, the world demand in crude
oil is expected to increase 1.5 percent, or 1.3 million barrels per
day. Meanwhile, the member countries of the Organization for
Economic Cooperation and Development, OECD, reported recently the
aggregate stockpile of crude oil had dropped to a five-year average
low last month.
(China Daily October 17, 2007)
