Fuel oil futures hit the daily limit for three consecutive trading days; the exchange warns of market volatility risks

On March 4th, after the market close, the Shanghai Futures Exchange issued a notice clarifying that the Fuel Oil Futures Contract 2604 will continue trading on March 5th, and simultaneously announced the daily price limit and margin requirements. Previously, this contract had hit the daily limit for three consecutive trading days.
Zhejiang Yong’an Guo Oil Energy Co., Ltd. Chairman Fang Zhengting believes that the ongoing escalation of the US-Iran conflict has a strong impact on the global energy supply chain, financial markets, and key trade channels, causing intense market volatility and significantly increasing uncertainty. China’s high-sulfur fuel oil has a high dependence on imports, mainly sourced from the Middle East. Market funds are highly sensitive to changes in the geopolitical situation in the Middle East, directly driving a sharp increase in high-sulfur fuel oil futures prices. The current market trend is driven by sudden geopolitical events, combined with concentrated market sentiment resonance, showing obvious short-term volatility and large risk exposure. Continuing trading of the Fuel Oil 2604 contract after three consecutive daily limit-ups helps to smoothly release offshore risk transmission pressure, avoid liquidity shortages and price distortions, and maintain the functions of price discovery and risk management in the futures market. Within the regulatory framework, it guides the market to return to rationality, with overall risks being controllable.