Group 1: Report Overview - Report Title: Crude Oil and Refined Oil Morning Report [2] - Report Date: October 31, 2025 [2] - Research Team: Energy and Chemicals Team of the Research Center [2] Group 2: Market Data Crude Oil and Related Products - **Price Changes (Oct 24 - Oct 30)**: WTI increased by $0.09, BRENT by $0.08, OMAN by $2.56, and SC decreased by $3.70. Other products also showed various price changes [3] - **Differences**: WTI - BRENT was around -$4.4, and other spreads like DUBAI - BRT also had specific values and changes [3] Domestic Products - **Prices and Changes**: Domestic gasoline remained at 7420 (unchanged from Oct 24 - Oct 30), and domestic diesel had related price - BRT spreads and changes [3] Other Products - **Prices and Changes**: Japan naphtha - BRT had a change of 0.91, and Singapore fuel oil and other products also had price and spread changes [3] Group 3: Daily News Russia's Fuel Exports - Russia's refined oil exports dropped to the lowest level since the Russia - Ukraine conflict. The daily average export volume of seaborne petroleum products in the first 26 days of October was 1.89 million barrels. Sanctions, attacks, and bad weather affected exports [5] Saudi's Fiscal Situation - Saudi's Q3 fiscal deficit widened to 88.5 billion riyals ($23.6 billion), a 160% increase from the previous quarter. Oil revenue decreased by 0.1%, and total revenue dropped by about 13% year - on - year [5] Market Perception of Russia Sanctions - TotalEnergies' CEO said the oil market underestimated the impact of Western sanctions on Russia, and the sanctions were already affecting oil flows [6] Hungary's Request for Sanction Exemption - Hungary's Prime Minister Orban hopes to get an exemption from US sanctions on Russian oil through a meeting with Trump [6] Group 4: Regional Fundamentals US Data (Oct 24 Week) - Crude oil exports increased by 158,000 barrels/day to 4.361 million barrels/day, domestic production increased by 15,000 barrels to 13.644 million barrels/day, and commercial crude inventory decreased by 6.858 million barrels (1.62%) [7] - Strategic Petroleum Reserve (SPR) inventory increased by 533,000 barrels (0.13%), and commercial crude imports decreased by 867,000 barrels/day [7] China's Situation (Oct 16 - Oct 23 Week) - Main refinery and Shandong local refinery operating rates declined. Domestic gasoline and diesel production and inventory decreased. Main refinery comprehensive profit declined, and local refinery comprehensive profit decreased month - on - month [7] Group 5: Weekly View Price Movement - Oil prices rebounded significantly this week, with Brent oil closing above $65 [7] Supply Impact - US sanctions on Russian oil producers may lead to a near - zero supply of Russian oil to India in the short term. India has increased purchases of Middle Eastern crude since September, supporting the Dubai market [7] Geopolitical and Fundamental Factors - US military strikes on Venezuela's transportation raised geopolitical concerns. EIA crude inventory decreased, US refinery operations rebounded, and the US Energy Department planned to buy 1 million barrels of crude for the SPR [7] Market Outlook - Short - term oil prices may rebound with increased volatility. Mid - term upside is limited due to OPEC's potential increase in production, and the oversupply situation will continue in the fourth quarter [7]

1. Report Industry Investment Rating No specific industry investment rating is provided in the report. 2. Core View of the Report The overall energy and chemical market is under pressure from supply and geopolitical factors. Crude oil faces supply pressure and geopolitical risks, and most chemical products are expected to continue to fluctuate and consolidate. The polyester terminal demand is improving, but the supply side of chemicals is a key negative factor. The market's response to the Sino - US summit is "buy on the rumor, sell on the news," and the OPEC+ is likely to continue to increase production at the upcoming meeting. [2][3][4] 3. Summary by Related Catalogs 3.1 Market Logic - The polyester chain's demand side is improving, with better terminal fabric shipments, inventory reduction, and improved nominal cash flow. However, the supply side of chemicals is a major negative factor. The meeting of the PTA and bottle - chip leading enterprises on the 30th had no substantial policies, which led to a decline in the day - trading session. [3] 3.2 Variety Analysis 3.2.1 Crude Oil - **View**: Supply pressure continues, and geopolitical risks still exist. - **Main Logic**: The Sino - US summit results are in line with expectations, but concerns about Russian oil remain. The macro and geopolitical drivers for oil prices are limited. Supply pressure suppresses prices, but geopolitical concerns still support prices to some extent. The price is expected to decline slowly and fluctuate weakly. [7] 3.2.2 Asphalt - **View**: With the weakening of crude oil and rebar, the asphalt futures price has no support. - **Main Logic**: OPEC+ may increase production in November, Saudi Arabia reduces the export discount of crude oil to Asia, and the end of the Palestine - Israel conflict and the realization of the positive news from the Sino - US summit lead to a decline in oil prices. The asphalt - fuel oil spread is expected to continue to decline, and the asphalt inventory pressure is large. [7] 3.2.3 High - Sulfur Fuel Oil - **View**: With the weakening of crude oil, the fuel oil futures price is weak. - **Main Logic**: OPEC+ supply increase and falling oil prices lead to a decline in high - sulfur fuel oil prices. Although the Palestine - Israel conflict has ended, the Russia - Ukraine conflict continues to escalate. The demand for fuel oil is still weak. [8] 3.2.4 Low - Sulfur Fuel Oil - **View**: Low - sulfur fuel oil fluctuates with crude oil. - **Main Logic**: It follows crude oil fluctuations, has low valuation, and faces supply increase and demand decline trends. [10] 3.2.5 Methanol - **View**: The port inventory pressure still exists, the olefins have declined, and methanol fluctuates lower. - **Main Logic**: The futures price fluctuates lower. The high port inventory suppresses prices, but there is still low - buying value considering the potential Iranian disturbances in winter. [26] 3.2.6 Urea - **View**: The market sentiment is pessimistic, and it is under continuous pressure. - **Main Logic**: The market sentiment is pessimistic due to the lack of export information updates from the nitrogen fertilizer association meeting. [26] 3.2.7 Ethylene Glycol (EG) - **View**: The coal - based production rate is continuously rising, and the supply - demand pattern deteriorates month - on - month. - **Main Logic**: The international oil price is weak, the coal - based production rate is high, the supply - demand pattern weakens, and the port inventory accumulates. [18][19] 3.2.8 PX - **View**: The meeting has no substantial measures, and PX returns to the fundamental pricing logic. - **Main Logic**: The crude oil price fluctuates and falls. Some PX factories have maintenance, and the supply is temporarily stable. The short - term supply and demand are both strong, and the market gives back the previous emotional premium. [11] 3.2.9 PTA - **View**: The meeting has no substantial resolution, and PTA processing fees are still under pressure. - **Main Logic**: The upstream cost fluctuates and falls, the meeting has no substantial production reduction, some devices may restart, and the downstream polyester demand provides some support. [12] 3.2.10 Short - Fiber - **View**: The meeting has no positive news, the market sentiment turns cold, and polyester staple fiber remains consolidated. - **Main Logic**: The upstream cost is poor, the meeting has no clear production reduction measures, the supply side has a device restart, and the downstream demand is for rigid replenishment. The inventory is at a healthy level, and the profit has some support. [22][23] 3.2.11 Bottle - Chip - **View**: The PTA anti - involution meeting has no positive news. - **Main Logic**: The meeting fails to support the price, the supply - demand is stable, and the absolute price follows the upstream fluctuation, while the processing fee has some support. [24] 3.2.12 Pure Benzene - **View**: Affected by macro - events, pure benzene fluctuates. - **Main Logic**: The naphtha price is strong, but the opening of the Shandong - East China arbitrage window and the rumored maintenance of styrene devices suppress the price. [14][15] 3.2.13 Styrene - **View**: After the macro - disturbance, styrene rises and then falls. - **Main Logic**: Styrene follows the oil price to rebound, but the rebound is weak due to new production capacity and weak downstream follow - up. [16] 3.2.14 LLDPE - **View**: Maintenance slightly increases, and LLDPE is viewed within a range. - **Main Logic**: The macro - situation, oil price, and its own fundamentals limit the upside space, and the short - term price fluctuates within a range. [28] 3.2.15 PP - **View**: Maintenance is stable, the propane CP price is reduced, and PP is viewed within a range. - **Main Logic**: The reduction of the propane CP price drags down PP, and its own fundamentals have limited support. [29] 3.2.16 PL - **View**: The propane CP price is reduced again, and PL is weaker than PP in the short term. - **Main Logic**: The reduction of the propane CP price and weak downstream demand lead to a decline in PL prices. [30] 3.2.17 PVC - **View**: Market sentiment cools down, and PVC weakens. - **Main Logic**: The macro - sentiment cools down, and the PVC fundamentals are under pressure due to increased production, limited downstream demand, and anti - dumping pressure on exports. [31] 3.2.18 Caustic Soda - **View**: Supply and demand are under pressure, and the futures price is weak. - **Main Logic**: The macro - sentiment cools down, and the supply is high while the demand is inelastic, leading to inventory accumulation. [32]

Core Insights - The world's largest international oil firms are increasing production despite weakened crude prices and a potential supply glut in the coming months [1] - U.S. supermajors, ExxonMobil and Chevron, are achieving record oil production levels, particularly in the Permian region, while expanding internationally [2] - European supermajors, including TotalEnergies, Shell, and BP, are also ramping up production, shifting focus back to oil and gas after previous investments in low-carbon projects [4] Production Trends - ExxonMobil and Chevron reported record-high production in the Permian and globally, following significant acquisitions [2] - TotalEnergies anticipates that increased oil and gas production will enhance earnings for the third quarter, despite a decline in oil prices [3] - Shell and BP are experiencing rising production levels as they prioritize their core oil and gas operations [4] Market Outlook - Supermajors are optimistic about their ability to manage current lower prices and market surplus, planning to invest more in oil and gas to meet demand through at least the mid-2030s [5] - Unlike the International Energy Agency, which predicts peak oil demand by the end of the decade, major oil companies do not foresee a peak until the 2030s [6] - All major oil firms expect oil and gas to remain crucial for global economic growth and development through 2050 [7]

Core Insights - Big Oil is reporting third-quarter results, with no major surprises expected due to a year filled with tariffs, sanctions, and predictions of a supply glut [1] - Analysts are focusing on future plans for spending, production, and acquisitions, particularly looking ahead to 2026 [3] Company Performance - Equinor reported lower-than-expected results due to lower prices, despite increased oil and gas production [2] - Eni experienced better revenues and profits driven by higher production, even with lower prices [2] - Shell and TotalEnergies reported strong performance attributed to higher oil and gas production [2] Future Plans and Strategies - Analysts are interested in Chevron's merger with Hess Corp., Exxon's acquisition targets, and European Big Oil's strategies for share buybacks and dividends in a lower-price environment [3] - Natural gas is being prioritized by major companies, with Shell emphasizing its LNG business as a top priority for the next decade [5] - BP is focusing on gas and LNG, contracting Baker Hughes for a new LNG plant in Indonesia and winning an arbitration case regarding LNG cargos [6] - TotalEnergies lifted the force majeure on its Mozambique LNG project, with a revised cost of $4.5 billion and a capacity of 43 million tons of liquefied gas [6] - Exxon plans to announce the final investment decision on its LNG project in Mozambique by the end of Q1 2026, with another project, Golden Pass, expected to start operations by the end of this year [7]

Financial Data and Key Metrics Changes - The company reported contract drilling revenues of $1.03 billion for Q3 2025, with an average daily revenue of approximately $462,000, slightly above guidance due to the performance of the Deepwater Skiros [18] - Operating and maintenance expenses were $584 million, below guidance primarily due to deferred maintenance costs and a favorable legal dispute outcome [19] - Total liquidity at the end of Q3 was approximately $1.8 billion, including $833 million in unrestricted cash and $510 million from an undrawn revolving credit facility [19][20] - The company expects to end 2025 with total liquidity slightly above $1.4 billion, reflecting cash usage for debt reduction [23] Business Line Data and Key Metrics Changes - The company plans to retire nine rigs by mid-2026, including four drillships and one semi-submersible, to align with evolving costs and customer needs [6][7] - The fleet now consists of 24 contracted ultra-deepwater drillships and high-specification harsh environment semi-submersibles, with three additional seventh-generation drillships currently cold stacked [8] Market Data and Key Metrics Changes - Industry projections suggest an increase in upstream investment in offshore drilling, particularly in the deepwater segment, driven by the need to address supply imbalances [10] - The company anticipates a 10% growth in contracted floaters over the next 18 months, with stable activity in the U.S. Gulf and upcoming tenders in Brazil and Africa [11][12] Company Strategy and Development Direction - The company is focused on optimizing asset value and maintaining a disciplined approach to deploying its high-specification fleet, while also reducing debt and interest expenses [6][17] - Recent capital market transactions have allowed the company to reduce gross debt by approximately $1.2 billion and annualized interest expense by about $87 million [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in increasing deepwater utilization, projecting over 90% utilization by the end of 2026, with a potential increase in exploration activity from customers [30][31] - The company noted that customers are prioritizing free cash flow for debt reduction and are taking a measured approach to capital commitments, resulting in deferred near-term demand for drilling services [9] Other Important Information - The company achieved a revenue efficiency of 100% in September and 97.5% for the entire third quarter, reflecting strong operational performance [15] - The company is engaged with Petrobras to explore cost reduction opportunities, which could stimulate more work in Brazil [51][52] Q&A Session Summary Question: Confidence level on deepwater utilization increase - Management remains confident that utilization will exceed 90% by the end of 2026, with expectations for increased exploration activity from oil companies [30][31] Question: Discussions with Petrobras on cost reduction - The company confirmed ongoing discussions with Petrobras focused on reducing costs without materially affecting activity levels [51][52] Question: Future equity raise potential - Management indicated that they anticipate meeting obligations from cash flow and are focused on reducing debt rather than pursuing an equity raise [56][58] Question: Exploratory drilling timelines - Management noted that there is a growing conversation among customers about increasing exploration activity, with expectations for commitments to rigs in 2027 and 2028 [61][62]

Core Viewpoint - TotalEnergies' CEO stated that the French Parliament's tax plan is unfeasible, indicating potential challenges in the regulatory environment for the company [1] Group 1 - TotalEnergies plans to repurchase shares on the Paris Stock Exchange instead of the New York Stock Exchange, suggesting a strategic focus on its home market [1] - The budget for the Mozambique liquefied natural gas project remains approximately $20 billion, highlighting the company's significant investment in this area [1] - The company is working to reduce capital expenditures for the Papua New Guinea liquefied natural gas project, emphasizing the importance of cost management in a potentially weak market [1]

Market Overview - US stock index futures are all down, with Dow futures down 0.32%, S&P 500 futures down 0.35%, and Nasdaq futures down 0.55% [1] - European indices also show declines, with Germany's DAX down 0.18%, UK's FTSE 100 down 0.67%, France's CAC40 down 1.04%, and the Euro Stoxx 50 down 0.61% [2][3] - WTI crude oil prices fell by 0.86% to $59.96 per barrel, while Brent crude also dropped by 0.86% to $63.77 per barrel [4] Economic and Policy Updates - The meeting between Chinese President and US President Trump emphasized that economic and trade relations should be a stabilizing force rather than a point of conflict [5] - Federal Reserve Chairman Jerome Powell's comments on interest rate cuts have led to skepticism in the market, with the 10-year US Treasury yield holding steady at 4.08% after a previous spike [5] - Powell also stated that the current AI investment wave is fundamentally different from the internet bubble, highlighting that AI companies are rooted in profitability and real economic activity [6] Company Earnings and Performance - Roblox reported a record Q3 with 151.5 million daily active users, a 70% year-over-year increase, and bookings of $1.92 billion, exceeding analyst expectations [7] - Microsoft exceeded Q1 expectations with revenues of $77.7 billion, driven by a significant increase in capital expenditures related to AI [7] - Alphabet's Q3 revenue was $102.35 billion, up 16% year-over-year, with strong performance in its cloud division [8] - Meta's Q3 net profit fell 83% due to a one-time tax expense, despite a 26% increase in revenue to $51.24 billion [9] - Starbucks reported Q4 revenue of $9.57 billion, a 5.5% increase, with same-store sales returning to positive growth [10] - Shell's Q3 profit exceeded expectations, supported by strong oil and gas trading performance despite weak energy prices [11] - TotalEnergies' Q3 adjusted net profit fell 2.3% to $3.98 billion, meeting analyst expectations [12] - Stellantis reported a 13% increase in Q3 revenue to €37.2 billion, but issued a cost warning that affected stock performance [13] - Samsung Electronics' semiconductor division saw a 79% increase in Q3 operating profit, driven by AI demand [14] Future Outlook - OpenAI is reportedly preparing for an IPO that could value the company at $1 trillion, with plans to raise at least $60 billion [5] - Eli Lilly raised its full-year guidance due to strong sales from its weight loss and diabetes drugs, with Q3 sales reaching $17.6 billion [17] - Tesla plans to showcase its Cybercab model at the Shanghai International Import Expo in November [19]

Core Insights - TotalEnergies reported third-quarter earnings that were essentially flat year-over-year, with adjusted net income at $4 billion, slightly down from $4.1 billion in the same period of 2024, but higher than the second-quarter adjusted net income of $3.6 billion [1][2] Financial Performance - Cash flow from operations (CFFO) increased to $7.1 billion, representing a 7% rise compared to the second quarter and a 4% increase from the previous year [2] - The Exploration & Production division achieved adjusted net operating income of $2.2 billion and cash flow of $4.0 billion in the third quarter, marking a 10% and 6% increase quarter-over-quarter, respectively [3] - In the downstream sector, adjusted net operating income rose to $1.1 billion and cash flow increased to $1.7 billion, nearly $500 million higher year-over-year, driven by improved refining margins in Europe [4] Refining Margins - Refining margins across TotalEnergies' operations surged by 78% in the third quarter compared to the second quarter, with margins remaining above $50 per ton at the beginning of the fourth quarter [4][5] - The increase in refining margins is attributed to disruptions in diesel flows and low inventory levels, as Europe seeks to secure middle distillate supply amid sanctions against Russian oil producers [5]

Core Viewpoint - TotalEnergies (TTE.US) reported third-quarter profits in line with analyst expectations, driven by increased oil and gas production and stronger refining margins, despite a decline in prices [2] Financial Performance - Adjusted net profit for Q3 decreased by 2.3% to $3.98 billion, meeting average expectations [2] - Revenue for Q3 was $43.84 billion, down 7.6% year-on-year, and $510 million below expectations [2] - Cash flow from operating activities for Q3 was $8.349 billion, compared to $7.061 billion in the same period last year, aided by a $1.3 billion positive contribution from working capital [2] Production and Market Conditions - Oil and gas production increased by over 4% year-on-year, with total production at 2.51 million barrels of oil equivalent per day [2] - The company noted that lower oil prices compared to the previous year were due to concerns over oversupply from OPEC+ and other countries, alongside weak European petrochemical demand [2] Debt Management and Asset Disposals - TotalEnergies reduced its spending and share buyback plans to manage debt amid rising concerns from investors [2] - Net debt decreased from $26 billion at the end of June to $24.6 billion by the end of September [3] - The company expects total asset disposals of $2 billion in Q4, including divestitures in Nigeria, Norway, and renewable energy assets in North America and Greece [3][4] Future Outlook - The company anticipates maintaining its annual net investment guidance between $17 billion and $17.5 billion, based on internal investments and expected asset disposals [3] - Refining margins are expected to remain above $50 per ton in Q4 2025, driven by low diesel supply and inventory levels [3] - The debt ratio at the end of Q3 was 17.3%, projected to decrease to 15% to 16% by year-end [4]

Group 1 - The core viewpoint of the article is that Total Group reported third-quarter revenue of $43.84 billion, exceeding the estimated $38.69 billion [1] - The adjusted net profit for the third quarter was $3.98 billion, which represents a year-on-year decline of 2.3%, slightly above the estimated $3.96 billion [1]