📅 2026-10-09 · Fuel Oil · Single-name brief Legacy coverage

This report is provided by MacroTerms.com

Data as of: 2026-10-08 · Settlement: Exchange settlement (15:00 Beijing close, vs prior settlement)

Low Sulfur Fuel Oil (INE.LU) In-depth Analysis Report | Bullish | 2026-10-09

The current core conclusion for Low Sulfur Fuel Oil (INE.LU) is bullish. Three core reasons: First, the previous trading day's settlement price of 5650 [2026-10-08] is up 6.28% over 5 days, with the main contract's open interest rising alongside price and a suspected rollover; second, U.S. distillate inventories are 12.0% below the five-year seasonal average, and refinery utilization remains high, keeping supply-demand tight; third, the oil-gold ratio's 1-year percentile has reached 92.06%, indicating strong support from the crude oil side. The invalidation condition for the direction is INE.LU breaking below 5497.67 [2026-10-08 pivot S1].

I. Bottom Line & Directional Bias

The bottom line is mildly bullish on Low Sulfur Fuel Oil (INE.LU). Three core reasons: First, the technicals show that the previous trading day's settlement price of 5,650 [2026-10-08] is up 6.28% over 5 days, with main contract open interest at 63,278 lots, up 12,509 lots versus the prior reading. The open interest build alongside rising prices, with suspected contract rollover, shows clear signs of active long positioning. Second, on the fundamentals, U.S. distillate inventories as of 2026-10-02 are 12.0% below the five-year seasonal average, while refinery utilization remains at a high of 92.7%; the global marine low sulfur fuel oil supply-demand balance remains tight. Third, in cross-asset relative value, the oil-to-gold ratio sits at the 92.06% 1-year percentile, with strength in crude oil transmitting to the low sulfur fuel oil complex. The invalidation condition is INE.LU breaking below 5,497.67 [the pivot S1 level corresponding to the 2026-10-08 settlement]; if price breaks this support, the bullish thesis weakens.

II. Price Action & Technicals

The technical analysis for Low Sulfur Fuel Oil (INE.LU) is based on a unified market snapshot: the 2026-10-08 settlement price is 5,650, up 6.28% over 5 days and up 13.62% over 20 days; ATR14 is 296 (5.17% of the settlement price), indicating ample intraday volatility; RV20 is 53.1%, with implied volatility at a moderate level; the 20-day price range is 4,826–5,846, with the current price at the 87.9% position of the range, near the upper bound of the 20-day range. The pivot P is 5,641.33, R1 is 5,866.67, and S1 is 5,497.67; the current settlement price is slightly above pivot P, indicating short-term strength. The last completed weekly candle (2026-09-28 to 2026-09-30) closed at 5,162, with a weekly change of -8.75%, marking the bottoming zone after the prior correction; the current week (starting 2026-10-08) has not yet closed, with an intraday quote of 5,723, up 10.87% versus the settlement price, so beware of pullback risk after an oversized short-term rally. On the China night session, Low Sulfur Fuel Oil closed at 5,715 in the 2026-10-08 night session, -0.14% versus the day session close and +1.15% versus the settlement price; the night session was steady, with no sharp moves.

III. Supply-Demand Balance & Fundamental Drivers

The fundamental drivers for Low Sulfur Fuel Oil (INE.LU) focus on the global marine fuel oil supply-demand balance, analyzed in conjunction with EIA inventory data and U.S. refinery operations: As of 2026-10-02, EIA crude oil inventories stood at 424,134 thousand barrels, with a weekly change of -3,186 thousand barrels, a 4-week cumulative change of +65 thousand barrels, and +0.2% versus the five-year seasonal average, indicating stable crude inventory movements; gasoline inventories were 204,744 thousand barrels, with a weekly change of +382 thousand barrels, a 4-week cumulative change of -2,194 thousand barrels, and -6.3% versus the five-year seasonal average, with gasoline demand remaining resilient; distillate inventories were 105,138 thousand barrels, with a weekly change of -42 thousand barrels, a 4-week cumulative change of -1,136 thousand barrels, and -12.0% versus the five-year seasonal average. Distillate inventories are well below the five-year average, directly reflecting the recovery in global shipping demand driving growth in low sulfur fuel oil demand. U.S. refinery utilization remains at a high of 92.7%, with ample capacity utilization; as a byproduct of crude processing fractions, low sulfur fuel oil supply remains stable. In addition, the Baker Hughes U.S. oil rig count as of 2026-09-25 was 455 rigs, up 3 rigs week-on-week and up 31 rigs year-on-year; the rising rig count may signal higher future crude supply, but the short-term impact on low sulfur fuel oil supply is limited. Seasonally, the average return over the same 20 trading days in the past 6 years is -2.07%, with a median of -0.72% and up years accounting for 1/6, indicating weak seasonality; however, the current tight supply-demand balance dominates price action, and the seasonal effect is temporarily muted.

IV. Positioning & Fund Flows

The positioning structure and fund flows for Low Sulfur Fuel Oil (INE.LU) should be assessed in conjunction with main contract open interest, COT weekly changes, and volatility data: the main contract notional open interest is CNY 3.62bn, up CNY 716m on the day, corresponding to an open interest build of 12,509 lots. The open interest build alongside rising prices, with suspected contract rollover, means the reference value of the open interest change may be somewhat reduced due to the rollover, but the core feature of active long positioning remains unchanged. On implied volatility, ^OVX (WTI implied volatility) is 48.4 [2026-10-08], at the 41% 1-year percentile, a moderately low level; RV20 is 53.1%, with implied volatility slightly below realized volatility, indicating that the options market has not overpriced event risk and that the cost of long positioning is relatively reasonable. Note that while main contract open interest is building alongside rising prices, beware of short-term fluctuations in the positioning structure during the rollover process; if long positions continue to increase after the rollover is complete, the bullish thesis will be further reinforced. In addition, there is no divergence between price and open interest; the open interest build alongside rising prices is consistent with a normal pattern of active long buying, and fund flows are supportive of the long side.

V. Cross-Asset & Onshore-Offshore Value

The cross-asset relative value and international versus China market linkage for Low Sulfur Fuel Oil (INE.LU) must strictly cite the cross-asset snapshot data: On cross-asset relative value, the gold-silver ratio is 69.95 [2026-10-08], at the 80.16% 1-year percentile, a high level, with silver relatively weak; the copper-gold ratio is 1.58 [2026-10-08], at the 96.83% 1-year percentile, an extremely high level, reflecting strong global growth expectations; the oil-gold ratio is 0.022 [2026-10-08], at the 92.06% 1-year percentile, a high level, with crude oil strong relative to gold, and the strength in crude transmitting to the low sulfur fuel oil complex, providing support for low sulfur fuel oil. The 3:2:1 crack spread is USD 69.72/bbl [2026-10-08], with refinery margins still decent, providing some support on the supply side for low sulfur fuel oil. On the international versus China market, as Low Sulfur Fuel Oil is an INE-listed product and no international versus China market premium is mentioned in the cross-asset snapshot, no judgment on richness or cheapness is made; the focus is solely on the transmission logic from the crude oil side. In addition, the U.S. Dollar Index is 102.11 [2026-10-08], and the U.S. 10-year Treasury yield is 5.23% [2026-10-08]; the U.S. dollar and rates are moving steadily, and are not exerting significant pressure on low sulfur fuel oil.

VI. Supply Chain & Seasonal Inventory (Historical Statistics)

The seasonal statistics for Low Sulfur Fuel Oil (INE.LU) over the same 20 trading days in the past 6 years show an average return of -2.07%, a median return of -0.72%, and up years accounting for only 1/6, indicating weak seasonal performance. By year, the best-performing year in this period was 2023, with a gain of 0.84% over the same 20 trading days; the worst-performing year was 2020, with a loss of 6.74% over the same 20 trading days. Note that this seasonal sample covers only the past 6 years, with a limited sample size, and the current tight supply-demand balance has weakened the dominant role of seasonal factors on prices; this is only an auxiliary reference dimension.

VII. Scenario Analysis

Base case (probability 60%): Trigger condition is Low Sulfur Fuel Oil (INE.LU) holding above the 2026-10-08 settlement price of 5,650, with main contract open interest maintaining its build alongside rising prices; target level is pivot resistance R1 at 5,866.67, with the corresponding operation being to establish a long position in the main contract M2612. Bull case (probability 30%): Trigger condition is Low Sulfur Fuel Oil (INE.LU) breaking above R1 at 5,866.67, with U.S. distillate inventories remaining low and refinery utilization staying above 92.7%; target level is the upper bound of the 20-day range at 5,846 (note: no higher resistance was mentioned earlier, so the earlier 20-day range measure is retained), with the corresponding operation being to add to long positions. Bear case (probability 10%): Trigger condition is Low Sulfur Fuel Oil (INE.LU) breaking below the invalidation level of 5,497.67, with main contract open interest turning to an open interest cut; target level is the lower-middle part of the 20-day range at 4,826, with the corresponding operation being to close out long positions. The base case direction is consistent with the earlier view, remaining mildly bullish, with the core drivers still being the tight supply-demand balance and active long positioning.

VIII. Trading Strategies & Risk Management

Verbatim citation of the established strategies: Long, entry 5,752 / stop-loss 5,427 / target 6,239.5 / horizon 1-5d / risk-reward 1:1.5; Long, entry 5,708 / stop-loss 5,400 / target 6,170 / horizon 1-2w / risk-reward 1:1.5. The stop-loss settings are based on risk conversion: for the 5,752 entry, the corresponding stop distance is 325, or 1.1× ATR (ATR14 296); this level both covers short-term volatility risk and avoids being stopped out on a normal pullback. For the 5,708 entry, the corresponding stop distance is 308, or 1.04× ATR, suited to the risk control of a medium-term holding. Position sizing references the risk conversion: a single-trade risk budget of CNY 6,697 corresponds to a reference cap of 2 lots. The add/reduce rules are: if price breaks above R1 at 5,866.67 and open interest continues to build, add 1 lot on the basis of the base position at a per-lot risk standard of CNY 3,280, with total position not exceeding 3 lots.

IX. This Week's Data Calendar

Key data calendar for this week (Beijing time): On October 14 at 09:30, China CPI y/y and PPI y/y data will be released; this event affects the black, nonferrous, and chemicals sectors, so watch for its transmission effect on low sulfur fuel oil.

This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.

Single-name briefs Deep dive

SHFE GoldSHFE.AU 2026-10-09

Shanghai Gold (SHFE.AU) In-depth Analysis Report | Bullish Bias: Gold-to-Silver Ratio at Low Levels | 2026-10-09

Low Sulfur Fuel Oil (INE.LU) In-depth Analysis Report | Bullish | 2026-10-09

Today's Risk Map

Single-name briefs Deep dive

Previous briefs

⟠ This month's strategy backtest