Yesterday, domestic liquefied petroleum gas and bitumen commodity futures experienced significant gains, while energy sector commodities displayed some divergence.
As of the afternoon close, the PG liquefied petroleum gas main contract rose 4.5%, and the BU petroleum bitumen main contract increased 3.77%.
Against the broader backdrop, Middle East tensions remain elevated, with geopolitical risk premiums running strong, exerting an overall influence on energy sector commodity pricing.
Regarding the fundamentals of specific commodities, under the tense geopolitical environment, Middle East LPG supply remains at low levels, and the United States has become an important marginal source of incremental supply.
However, U.S. exports cannot fully offset the Middle East supply gap in terms of both total volume and structure, and new disruptive factors have recently emerged.
On one hand, U.S. domestic consumption has improved, propane inventories have seen counter-seasonal drawdowns, and MB prices have strengthened significantly.
On the other hand, due to compressor failures, the Energy Transfer Nederland terminal has issued a force majeure notice, with shipments expected to be delayed in October and November, which will further reinforce MB prices.
The Asia-Pacific market needs to offer high premiums to attract U.S. cargoes, FEI prices are performing strongly, and this is providing a boost to the domestic market.
Regarding petroleum bitumen, recent demand declines have led to a marginal weakening of fundamentals, with spot prices pulling back from highs.
But overall, the raw material supply-side conflict has not been substantively resolved, supply-side increments remain insufficient, and the tight supply-demand structure has not reversed.
The previous sharp decline in the futures market had already priced in the spot market weakness in advance, and against the backdrop of firm cost-side support and spot prices stabilizing and rebounding again, the pessimistic expectations reflected in the futures market have been adjusted, with a notable rebound in recent days driving partial convergence of the high basis.
Looking ahead, although market fundamental realities and drivers remain strong, potential important variables also warrant attention: first, a turning point in the geopolitical situation; second, negative feedback from downstream demand.
Investment advisory business qualification: CSRC License [2011] No. 1289
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