China refineries seek less fuel oil as they opt for cheaper crude, sources say

China’s fuel oil demand outlook remains weak, with imports hitting a record monthly low as refiners cut output and switch to cheaper crude following the U.S.-Iran war. The article suggests a prolonged recovery path driven by lower refining runs and bargain crude economics. Near term, the development is likely to pressure fuel-oil related supply/demand expectations, with moderate implications for energy prices.

Analysis

China’s fuel oil demand outlook remains weak, with imports hitting a record monthly low as refiners cut output and switch to cheaper crude following the U.S.-Iran war. The article suggests a prolonged recovery path driven by lower refining runs and bargain crude economics. Near term, the development is likely to pressure fuel-oil related supply/demand expectations, with moderate implications for energy prices.