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| China HSFO Futures Settle Lower On Crude; Trading Thin |
| News Archive - Oil, Gas & Petrochemicals - September news | |
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(ChinaOilweb, Sept 29, 2006) High-sulfur fuel oil futures on the Shanghai Futures Exchange settled lower Friday, tracking softer crude futures, with trading thin ahead of the Chinese National Day holidays Oct. 1-7. Short-covering in late trade pushed the benchmark December contract to close at CNY2,936 a metric ton, down CNY3, after hitting an intraday high of CNY2,938/ton. But the contract's settlement - an average of weighted prices for the whole session - was much lower than the closing price. December settled at CNY2,917/ton, down CNY22. The combined trading volume for all contracts fell by 60,990 lots to 88,232 lots - the lowest this month - as the market was already in a holiday mood. One lot is equivalent to 10 tons. Open interest for all contracts fell by 8,546 lots to 67,608 lots, suggesting traders squared their positions on the last session before the long holiday. "Nymex November crude futures are facing strong technical and psychological support at $60.00 a barrel," said Zhu Jie, an analyst at Capital Futures. "So many traders prefer to square their short positions ahead of the long holiday," he added. Meanwhile, profit-taking was also seen during the session, though it wasn't as widespread as short-covering. This was mainly due to sluggish spot fundamentals stemming from high inventories and weak end user demand, analysts said. Analysts expect the December contract to continue trading in CNY2,850-CNY3,000/ton after the holiday, barring any sharp movement in crude futures during this period. Front-month fuel oil futures for October delivery Friday expired at CNY2,750/ton, down CNY44 from Thursday. Open interest fell by 320 lots to 3,460 lots. On Thursday, light, sweet crude for November delivery on the New York Mercantile Exchange slipped 20 cents to settle at $62.76/bbl as senior officials of the Organization of Petroleum Exporting Countries quashed speculation that the group is cutting production to tighten supply. source:ChinaOilweb |
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