Futures: fuel oil rose in shock on Wednesday, closing at 1,644 (up 27), shedding more than 21,000 positions and reducing trading volume. Europe and the United States gradually restart the economy, Saudi Arabia plans to increase the intensity of production reduction, crude oil demand gradually picked up, market sentiment has improved, the low oil price gradually rebounded, and the monthly gap narrowed. Fuel oil fluctuates in short term or under pressure. Pay attention to international news, epidemic development of COVID-19 and market sentiment change.

Strategic analysis: Currently, the newly confirmed cases in the world are still at a high level. The epidemic center has shifted from Europe and the United States to emerging market countries, and the newly increased cases in the United States remain at a high level. After the sharp rebound of oil price, the monthly difference narrowed, and the increase of oil storage demand led to the rise of freight rates, supporting the forward price difference between internal and external prices of fuel contracts. From July 3, the previous exchange increased the storage fee of futures fuel oil from 1.4 RMB/ton/day to 3 RMB/ton/day, and the contract price difference between the far and the month widened. Iron ore shipments from Brazil and Australia fell on a month on month basis, while the demand for fuel oil processing in India was strong. The worst stage of crude oil demand has passed, but it still needs to recover for a long time; if the accumulated reservoir pressure continues or COVID-19 breaks out again, the oil price has the risk of further exploration.

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