For the Quarter Ending September 2025
North America
• In United States, the Low Sulphur Heavy Stock (LSHS) Price Index rose quarter-over-quarter in Q3 2025, influenced by tight supply.
• LSHS production costs increased, reflecting a 2.6% year-over-year rise in PPI in August 2025 for producers.
• Demand for LSHS was subdued due to a marginal 0.1% year-over-year increase in industrial production in September 2025.
• US Gulf Coast residual fuel oil inventories plummeted to a multi-decade low in July 2025, indicating significant supply constraints.
• Regional heavy feedstock supply tightened in Q3 2025, impacted by halted imports and Canadian crude diversion.
• US Gulf Coast fuel oil imports declined in the first seven months of 2025, further limiting market availability.
• Consumer confidence declined to 94.2 in September 2025, indirectly suggesting a bearish outlook for industrial LSHS demand.
• The LSHS Price Index forecast suggests continued upward pressure due to persistent supply challenges and elevated refinery margins.
Why did the price of Low Sulphur Heavy Stock (LSHS) change in September 2025 in North America?
• US Gulf Coast residual fuel oil inventories plummeted to a multi-decade low in July 2025.
• Regional supply of heavy feedstocks tightened in Q3 2025, restricting LSHS production.
• US Gulf Coast fuel oil imports declined in the first seven months of 2025, reducing market availability.
APAC
• In China, the Low Sulphur Heavy Stock (LSHS) Price Index fell quarter-over-quarter in Q3 2025, influenced by contracting manufacturing activity.
• The LSHS price forecast suggests stability to slight downward pressure due to persistent inventory builds.
• LSHS production costs were stable in Q3 2025, influenced by stable crude oil prices and OPEC+ production.
• Demand for LSHS showed mixed signals; industrial production grew 6.5% YoY in September 2025, yet Manufacturing Index contracted.
• Global oil demand growth was revised higher in Q3 2025, significantly driven by China, supporting LSHS consumption.
• Global observed oil inventories rose in August 2025, reaching a four-year high, indicating an oversupplied market.
• Chinese seaborne crude oil imports strengthened in Q3 2025, with increased stockpiling activity.
• Consumer confidence registered 89.6 in September 2025, reflecting pessimism that could dampen overall economic activity.
Why did the price of Low Sulphur Heavy Stock (LSHS) change in September 2025 in APAC?
• Negative CPI (-0.3% YoY) and PPI (-2.3% YoY) in September 2025 indicated weak industrial demand.
• The Manufacturing Index contracted in September 2025, reducing industrial activity and LSHS demand.
• Rising global oil inventories, reaching a four-year high in August 2025, contributed to market oversupply.
Europe
• In Germany, the Low Sulphur Heavy Stock (LSHS) Price Index fell quarter-over-quarter in Q3 2025, due to contracting industrial activity.
• LSHS production costs faced downward pressure from a 1.7% PPI decline in September 2025, reflecting lower energy.
• The LSHS demand outlook was bearish in Q3 2025, with the Manufacturing Index contracting and industrial production declining.
• Global oil inventories continued building in July 2025, contributing to ample supply for LSHS.
• Crude oil prices remained stable throughout Q3 2025, influencing LSHS feedstock costs.
• Refinery margins for petroleum products increased in Q3 2025, impacting LSHS production economics.
• Freight transport activity strengthened in Q3 2025, offering indirect support for LSHS demand.
• Consumer Price Index rose 2.4% in September 2025, indicating higher operational costs for LSHS consuming industries.
• Global oil supply surged in September 2025, driven by increased OPEC+ production, increasing market availability.
Why did the price of Low Sulphur Heavy Stock (LSHS) change in September 2025 in Europe?
• Industrial production declined by 1.0% in September 2025, reducing LSHS demand from manufacturing.
• Producer Price Index fell 1.7% in September 2025, indicating lower energy and feedstock costs.
• Global oil supply surged in September 2025, alongside inventory builds, increasing market availability.
