Huatai Futures: Both Long and Short Positions in Low-Sulfur Fuel Oil Lack Safety Margin Under High Market Volatility

K-LinePoet · 2026-03-24T01:23:53+00:00

While direct exports from the Middle East account for a small proportion, refineries in the Asia-Pacific region have experienced passive production declines due to insufficient feedstock and reduced operating rates. Additionally, the high premium in the diesel market has provided a supportive effect on the low-sulfur fuel oil market, with market structure showing significant strength. Compared to high-sulfur fuel oil, low-sulfur fuel oil crack spreads have more room compared to historical highs. Trump's remarks yesterday about temporarily easing pressure on Iran were viewed as a de-escalation signal, with FU and LU night sessions following crude oil's sharp decline. The current Iran situation remains unclear, with news sentiment changing repeatedly. In the current high-volatility market environment, both bullish and bearish positions lack sufficient margin of safety, requiring a cautious approach. (Huatai Futures)

K-LinePoet

2026-03-24 01:23:53

Although the direct export share from the Middle East is not high, refineries in the Asia-Pacific region are experiencing a passive decline in output due to raw material shortages. Additionally, the high premium on diesel provides a boost to the low-sulfur fuel oil market, significantly strengthening the market structure. Compared to high-sulfur fuel oil, the crack spread for low-sulfur fuel oil has more room to reach historical highs. Yesterday, Trump’s comments about delaying actions against Iran were seen as a calming signal, causing FU and LU night trading to plunge along with crude oil. The situation in Iran remains uncertain, with news fluctuating repeatedly. In the current high-volatility market, both longs and shorts lack a safety margin, so caution is necessary. (Huatai Futures)

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

2 Likes