Guolian Minsheng Securities·2025-11-11 12:36Investment Rating - The report maintains an "Outperform" rating for the oil and petrochemical industry [7] Core Viewpoints - OPEC+ has unexpectedly increased production, and the U.S. "reciprocal tariffs" are suppressing demand, leading to downward pressure on oil prices. However, the slowdown in U.S. oil and gas production growth may provide fundamental support. The report remains optimistic about leading oil and gas state-owned enterprises with high-quality upstream assets, high dividends, and low valuations. In the mid and downstream sectors, the current market investment strategy is diversified, with a focus on "anti-involution," domestic demand, and emerging industries [4][12] Summary by Sections 1. Oil Price Trends and Upstream Performance - In 2025, OPEC+ announced multiple production increases, which pressured oil prices. The average Brent and WTI oil prices in Q3 2025 were $68.17/barrel and $64.96/barrel, respectively, down 13.40% and 13.78% year-on-year. The leading domestic oil and gas state-owned enterprises have maintained stable performance through continuous reserve increases and cost reductions, which may help offset the pressure from oil prices [9][16] 2. Midstream Refining Sector - The midstream refining sector is under pressure from supply and demand but may benefit from "anti-involution" policies that could improve the supply-demand balance. In Q3 2025, the PX-crude oil price spread averaged 2540 RMB/ton, down 7.96% year-on-year. The profitability of refined oil products remains under pressure, but the "anti-involution" policy may accelerate the elimination of excess capacity, leading to a structural recovery in the midstream refining sector [10][12] 3. Downstream Basic Chemical Products - The basic chemical sector has seen a divergence in performance among sub-sectors, with 17 sub-sectors, including non-metallic materials, civil explosives, and agricultural chemicals, showing revenue and profit growth year-on-year. However, some sectors like soda ash and organic silicon have experienced significant declines. The report suggests that the chemical industry, which has been at a low point for four years, may enter a recovery cycle supported by liquidity easing and "anti-involution" policies [11][12] 4. Investment Recommendations - The report recommends focusing on leading oil and gas state-owned enterprises with high-quality upstream assets and high dividends. It also suggests paying attention to traditional cyclical chemical sectors that may see improvements due to "anti-involution" policies, as well as sectors supported by domestic demand and emerging industries with high growth potential [12]