Fuel oil futures surge 4.4%
Updated: 2007-11-27 10:06
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.
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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.
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