Core Viewpoint - The oil market is experiencing its largest annual decline since 2020, with a year-to-date drop of 18% due to oversupply and geopolitical risks, and forecasts indicate that supply-demand imbalances will worsen by 2026 [1][4]. Group 1: Market Dynamics - Global oil supply is expected to exceed demand significantly, with projections indicating a surplus of over 2 million barrels per day by 2025, which will worsen in the following year [5]. - OPEC+ has shifted from a price-supporting strategy to increasing production to capture market share, contributing to market volatility [5]. - The U.S. shale oil production has reached historical highs, further adding to the supply, while countries like Brazil and Guyana have also increased their output [5]. Group 2: Price Trends and Economic Impact - Oil prices are anticipated to fluctuate between $50 and $70, influenced by strong production from non-OPEC countries and potential risks related to Venezuela and Russia [2][5]. - The decline in oil prices is helping to alleviate inflationary pressures, providing support for central banks in their efforts to control rising prices [2][5]. Group 3: Geopolitical Factors - Geopolitical tensions remain a critical factor influencing market outlook, with the U.S. pushing for an end to the Russia-Ukraine conflict, which could alleviate the backlog of Russian oil at sea [6]. - The U.S. is also detaining tankers carrying Venezuelan oil, leading to a reduction in Venezuela's production [6]. - Trump's recent comments regarding potential actions against Iran's nuclear program have previously caused oil prices to spike, indicating the sensitivity of the market to geopolitical developments [3][6].

Core Viewpoint - Oil prices are expected to decline by approximately 20% in 2025 due to ongoing market oversupply, with prices likely remaining under pressure in the early part of the year [1][2]. Group 1: Market Conditions - Traders are closely monitoring the upcoming OPEC+ meeting, where the cartel is expected to reaffirm its current production plans, indicating a relatively loose supply-demand environment following a recent increase in supply [1]. - Prior to the OPEC+ meeting, official data on the U.S. market conditions will be released, with the American Petroleum Institute reporting an increase in crude oil and refined product inventories [1]. Group 2: Price Projections - The Brent crude oil price started 2025 at approximately $75 per barrel but fell to $58.40 during the year [2]. - As 2026 approaches, the spot market may see even lower prices, although sporadic geopolitical conflicts could provide short-term price boosts [2].

Report Industry Investment Ratings - Crude oil: ★★★ (more bullish trend with a relatively appropriate current investment opportunity) [2] - Fuel oil: ★★★ (more bullish trend with a relatively appropriate current investment opportunity) [2] - Low-sulfur fuel oil: ★★★ (more bullish trend with a relatively appropriate current investment opportunity) [2] - Asphalt: ★★★ (more bullish trend with a relatively appropriate current investment opportunity) [2] Core Views - The current fundamental pattern of oil prices is still dominated by oversupply, leading to a downward shift in the oil price center [3] - Geopolitical factors provide short - term support for fuel oil and low - sulfur fuel oil, but do not change the oversupply situation; the market is expected to remain weak [4] - The commercial inventory of asphalt has weak de - stocking, and cost factors provide bottom support [5] Summary by Related Catalogs Crude Oil - The EIA predicts that the average prices of Brent and WTI crude oil in 2026 will be $55/barrel and $51/barrel respectively, and global inventory may increase by over 2 million barrels per day [3] - Geopolitical conflicts lead to pulse - type price increases, but the long - term concern about oversupply persists, and the main tone of loose supply - demand remains unchanged [3] Fuel Oil & Low - Sulfur Fuel Oil - Geopolitical factors such as the slowdown of loading in the Middle East and Russia due to the Russia - Ukraine conflict and sanctions cause short - term market disturbances [4] - The improvement of refinery profit and the US blockade of Venezuelan oil exports may boost the demand for high - sulfur fuel oil as feedstock, but high inventory pressure is significant [4] - Low - sulfur fuel oil supply is expected to gradually recover; demand for marine fuel is weak and the weak trend is difficult to reverse [4] Asphalt - Last week, the commercial inventory of asphalt had weak de - stocking, and the factory inventory ended the de - stocking trend since mid - October and started to increase [5] - The US - Venezuela situation has affected the supply of heavy raw materials, and cost factors provide bottom support for asphalt [5]

Report Industry Investment Rating No relevant content provided. Core Viewpoints of the Report - Gold: Inflation is moderately declining [2]. - Silver: Undergoing high - level adjustment [2]. - Copper: The strengthening of LME spot prices supports the price [2]. - Zinc: Showing a tendency of oscillating upward [2]. - Lead: Inventory increase is pressuring the price [2]. - Tin: Supply is facing new disturbances [2]. - Aluminum: Exhibiting a strong - side oscillation [2]. - Alumina: Continuing to bottom - out [2]. - Cast aluminum alloy: Following the trend of electrolytic aluminum [2]. - Nickel: There is a game between capital and industrial forces, and attention should be paid to the emergence of structural opportunities [2]. - Stainless steel: The fundamentals restrict its elasticity, but attention should be paid to the policy risks in Indonesia [2]. Summary of Each Section 1. Gold and Silver Fundamental Data - **Price**: Shanghai Gold 2602 closed at 984.84 with a daily decline of 2.22%; Comex Gold 2602 closed at 4352.30 with a daily increase of 0.05%. Shanghai Silver 2602 closed at 18140 with a daily decline of 0.35%; Comex Silver 2602 closed at 76.015 with a daily increase of 6.11% [4]. - **Volume and Open Interest**: The trading volume of Shanghai Gold 2602 was 391,541, an increase of 46,319 from the previous day, and the open interest was 144,462, a decrease of 21,562. The trading volume of Shanghai Silver 2602 was 1,127,485, a decrease of 315,320, and the open interest was 195,074, a decrease of 30,842 [4]. - **Inventory**: The inventory of Shanghai Gold was 97,704 kg, unchanged from the previous day; the inventory of Comex Gold (in troy ounces) was 36,223,374, an increase of 32,119. The inventory of Shanghai Silver was 755,754 kg, a decrease of 40,985 [4]. - **Spread**: The spread between Gold T + D and AU2602 was - 2.64, unchanged from the previous day; the spread between Silver T + D and AG2602 was - 592, a decrease of 442 from the previous day [4]. News - Most Fed officials expect it to be appropriate to continue cutting interest rates after December, while some advocate keeping rates unchanged for "some time" [4]. - Reportedly, OPEC + is likely to maintain the suspension of the production - increase plan this week due to significant supply - surplus pressure [6]. - China has advanced the plan of issuing the first batch of 625 billion yuan of ultra - long - term special treasury bonds in 2026 to support consumer goods trade - in programs. The 2026 national subsidy plan has been released, with new smart products added, home decoration and electric bicycles removed, and subsidy standards for home appliances and cars adjusted [6]. - Starting next year, individuals selling homes purchased over two years ago will be exempt from value - added tax [6]. - The Central Rural Work Conference emphasized strengthening research on key core agricultural technologies and efficient transformation and application of scientific and technological achievements, and developing new high - quality agricultural productivity according to local conditions [6]. - Li Qiang proposed to refine taxpayers and the scope of taxation and determine calculation methods for taxable amounts in different situations [6]. Trend Strength - Gold trend strength: 0; Silver trend strength: 0 [6] 2. Copper Fundamental Data - **Price**: The Shanghai copper main contract closed at 98,090 with a daily decline of 0.78%, and the night - session closing price was 99,220 with a rise of 1.15%. The LME copper 3M electronic disk closed at 12,674 with a daily increase of 4.02% [7]. - **Volume and Open Interest**: The trading volume of the Shanghai copper index was 832,280, a decrease of 142,367 from the previous day, and the open interest was 625,625, a decrease of 17,019. The trading volume of the LME copper 3M electronic disk was 30,309, a decrease of 34,327, and the open interest was 342,000, an increase of 1,036 [7]. - **Inventory**: The Shanghai copper inventory was 71,738 tons, an increase of 5,860 tons; the LME copper inventory was 149,475 tons, a decrease of 5,100 tons, and the cancelled warrant ratio was 26.21%, a decrease of 2.31% [7]. - **Spread**: The LME copper cash - to - 3M spread was 31.35, an increase of 11.66 from the previous day; the spot - to - near - month futures spread of Shanghai copper was - 240, an increase of 90 [7]. News - Most Fed officials expect it to be appropriate to continue cutting interest rates after December, and most participants believe that if inflation declines as expected, further rate cuts may be appropriate [7]. - The 2026 national subsidy plan has been released, with new smart products added, home decoration and electric bicycles removed, and subsidy standards for home appliances and cars adjusted. The first batch of 625 billion yuan of ultra - long - term special treasury bonds in 2026 to support consumer goods trade - in programs has been advanced [7]. - The Peruvian Congress approved a one - year extension of the temporary licenses for small - scale miners until the end of 2026 [7]. - From January to November 2025, Kazakhstan's refined copper production increased by 2.5% year - on - year to 431,998 tons [9]. - In November 2025, China's imports of copper ore and concentrates were 2.53 million tons, a month - on - month increase of 3.05% and a year - on - year increase of 13.13% [9]. - The Chilean government initiated the preliminary mediation process for the labor contract negotiation of the Mantoverde copper - gold mine. Workers will prepare for a strike if the negotiation fails [9]. - On December 29, the main project construction and core equipment installation of the second - phase expansion project of the Julong Copper Mine were completed and successfully test - run, a key step before production [9]. Trend Strength - Copper trend strength: 1 [9] 3. Zinc Fundamental Data - **Price**: The Shanghai zinc main contract closed at 23,380 yuan/ton with a daily increase of 0.54%, and the LME zinc 3M electronic disk closed at 3,083.5 US dollars/ton with a daily decline of 0.10% [10]. - **Volume and Open Interest**: The trading volume of the Shanghai zinc main contract was 148,502 lots, a decrease of 94,405 lots; the open interest was 93,470 lots, a decrease of 217 lots. The trading volume of the LME zinc was 13,418 lots, an increase of 7,474 lots, and the open interest was 232,259 lots, an increase of 4,129 lots [10]. - **Spread and Inventory**: The Shanghai 0 zinc premium was 120 yuan/ton, a decrease of 10 yuan/ton; the LME CASH - 3M spread was - 30 US dollars/ton, a decrease of 1.74 US dollars/ton. The Shanghai zinc futures inventory was 42,387 tons, an increase of 1,403 tons; the LME zinc inventory was 106,325 tons, a decrease of 225 tons [10]. News - The 2026 national subsidy plan has new smart products added, home decoration and electric bicycles removed, and subsidy standards for home appliances and cars adjusted. The subsidy for new cars is 12% or 10% of the car price, with the upper limit remaining the same as in 2025. The subsidy range for home appliances has been reduced, and the subsidy ratio for first - grade energy - efficient home appliances has decreased from 20% to 15%, with the maximum subsidy per appliance dropping from 2,000 yuan to 1,500 yuan [11]. - The first batch of 625 billion yuan of ultra - long - term special treasury bonds in 2026 to support consumer goods trade - in programs has been advanced [11]. Trend Strength - Zinc trend strength: 1 [13] 4. Lead Fundamental Data - **Price**: The Shanghai lead main contract closed at 17,505 yuan/ton with a daily increase of 0.09%, and the LME lead 3M electronic disk closed at 2,010.5 US dollars/ton with a daily increase of 0.55% [14]. - **Volume and Open Interest**: The trading volume of the Shanghai lead main contract was 69,782 lots, a decrease of 14,987 lots; the open interest was 53,891 lots, a decrease of 584 lots. The trading volume of the LME lead was 9,284 lots, an increase of 5,478 lots, and the open interest was 178,618 lots, an increase of 644 lots [14]. - **Spread and Inventory**: The Shanghai 1 lead premium was 0 yuan/ton, an increase of 25 yuan/ton; the LME CASH - 3M spread was - 43.7 US dollars/ton, a decrease of 5.89 US dollars/ton. The Shanghai lead futures inventory was 13,111 tons, an increase of 1,528 tons; the LME lead inventory was 245,275 tons, an increase of 1,000 tons [14]. News - Most Fed officials expect it to be appropriate to continue cutting interest rates after December, and most participants believe that if inflation declines as expected, further rate cuts may be appropriate [15]. - The 2026 national subsidy plan has been released, with new smart products added, home decoration and electric bicycles removed, and subsidy standards for home appliances and cars adjusted. The first batch of 625 billion yuan of ultra - long - term special treasury bonds in 2026 to support consumer goods trade - in programs has been advanced [15]. Trend Strength - Lead trend strength: 0 [15] 5. Tin Fundamental Data - **Price**: The Shanghai tin main contract closed at 326,330 yuan/ton with a daily decline of 2.47%, and the LME tin 3M electronic disk closed at 42,195 US dollars/ton with a daily increase of 5.46% [17]. - **Volume and Open Interest**: The trading volume of the Shanghai tin main contract was 441,257 lots, a decrease of 12,067 lots, and the open interest was 43,769 lots, a decrease of 6,392 lots. The trading volume of the LME tin 3M electronic disk was 180 lots, a decrease of 9 lots, and the open interest was 13,988 lots, an increase of 53 lots [17]. - **Inventory and Spread**: The Shanghai tin inventory was 7,772 tons, a decrease of 133 tons; the LME tin inventory was 5,330 tons, an increase of 185 tons, and the cancelled warrant ratio was 6.57%, a decrease of 0.38%. The SMM 1 tin ingot price was 339,800 yuan/ton, a decrease of 800 yuan/ton [17]. News - Similar to the news in the gold and silver section, including Fed rate - cut expectations, OPEC + production - plan news, China's subsidy and bond - issuance news, etc. [18] Trend Strength - Tin trend strength: 1 [19] 6. Aluminum, Alumina, and Cast Aluminum Alloy Fundamental Data - **Aluminum**: The Shanghai aluminum main contract closed at 22,565 yuan/ton, a decrease of 5 yuan/ton. The LME aluminum 3M closed at 2,987 US dollars/ton, an increase of 38 US dollars/ton. The Shanghai aluminum main - contract trading volume was 369,628 lots, a decrease of 248,997 lots, and the open interest was 267,707 lots, a decrease of 21,548 lots [20]. - **Alumina**: The Shanghai alumina main contract closed at 2,751 yuan/ton, unchanged. The trading volume was 699,429 lots, a decrease of 609,434 lots, and the open interest was 404,205 lots, an increase of 7,530 lots [20]. - **Cast Aluminum Alloy**: The aluminum alloy main contract closed at 21,475 yuan/ton, a decrease of 115 yuan/ton. The trading volume was 9,685 lots, an increase of 546 lots, and the open interest was 15,866 lots, an increase of 9,810 lots [20]. News - Starting next year, individuals selling homes purchased over two years ago will be exempt from value - added tax [22]. - Most Fed officials expect it to be appropriate to continue cutting interest rates after December, and most participants believe that if inflation declines as expected, further rate cuts may be appropriate [22]. Trend Strength - Aluminum trend strength: 1; Alumina trend strength: 0; Aluminum alloy trend strength: 1 [22] 7. Nickel and Stainless Steel Fundamental Data - **Price**: The Shanghai nickel main contract closed at 132,390 yuan/ton, an increase of 6,680 yuan/ton; the stainless - steel main contract closed at 13,090 yuan/ton, an increase of 180 yuan/ton [24]. - **Volume**: The trading volume of the Shanghai nickel main contract was 1,000,602 lots, an increase of 215,362 lots; the trading volume of the stainless - steel main contract was 298,305 lots, an increase of 33,281 lots [24]. - **Industry - Chain Data**: The price of 1 imported nickel was 129,300 yuan/ton, an increase of 700 yuan/ton; the price of 8 - 12% high - nickel pig iron (ex - factory price) was 913 yuan/ton, an increase of 2 yuan/ton [24]. News - In September, the Indonesian Forestry Working Group took over more than 148 hectares of the PT Weda Bay Nickel mining area, which is expected to affect nickel production by about 600 metal tons per month [24]. - China has suspended an unofficial subsidy for imported copper and nickel from Russia [25]. - The Indonesian government has sanctioned 190 mining companies for failing to provide claim and refund guarantees [25]. - The Indonesian Ministry of Energy and Mineral Resources issued a ministerial order regarding the RKAB approval procedure for mines in 2026 [26]. - Trump claimed to impose an additional 100% tariff on China and implement export controls on "all key software" starting from November 1 [26]. - The Indonesian government has suspended the issuance of new smelting licenses for certain nickel products [27]. - Safety inspections in Indonesian industrial parks have affected the production of some nickel wet - process projects, with an expected impact of about 6,000 nickel metal tons in December [27]. - In November, New York Fed President John Williams and Fed Governor Stephen Miran made dovish remarks, increasing the probability of a 25 - basis - point rate cut in December [27]. - China will implement export - license management for some steel products starting from January 1, 2026 [27]. - The Indonesian government plans to revise the benchmark - price formula for nickel ore products in early 2026 and will levy royalties on cobalt as an independent commodity [27]. - The Indonesian government plans to significantly reduce the nickel - ore production target in 2026 from 379 million tons to 250 million tons [28]. - Fifty Indonesian nickel - mining enterprises face potential fines of about 80.2 trillion Indonesian rupiah for illegal occupation of forest land [28]. Trend Strength - Nickel trend strength: 0; Stainless - steel trend strength: 0 [29]

Report Industry Investment Ratings - Crude oil: ★★★ (indicating a clear short - term bearish trend with appropriate investment opportunities) [4] - Fuel oil: ☆☆☆ (short - term trend is in a relatively balanced state, and the current market is not very operable) [4] - Low - sulfur fuel oil: ★★★ (indicating a clear short - term bearish trend with appropriate investment opportunities) [4] - Asphalt: ★★★ (indicating a clear short - term bearish trend with appropriate investment opportunities) [4] Report's Core Views - The geopolitical conflict has not fundamentally changed the pattern of oversupply in the energy market, and most energy products are expected to be under pressure [1][2][3] Summary by Related Catalogs Crude Oil - After the US - Ukraine talks, the geopolitical premium has a pulsed impact on oil prices, but the long - term concern about oversupply persists. The US Department of Energy predicts that in 2026, the average prices of Brent and WTI crude oil will be $55/barrel and $51/barrel respectively, and global inventories may increase by over 2 million barrels per day [1] Fuel Oil - Geopolitical factors are short - term fluctuations. High - sulfur fuel oil has potential demand support, but high inventory pressure is significant. Low - sulfur fuel oil is expected to be weak due to increased supply and lack of strong demand [2] Asphalt - Since December, the weekly shipment volume has been at a low level in the past four years. The supply - demand of asphalt is marginally loose, and it will return to a price - pressured pattern dominated by supply - demand [3]

Investment Rating - The report does not explicitly state an investment rating for the oil refining industry Core Insights - The domestic key refining project price difference is 2557.23 CNY/ton, with a week-on-week change of +11.87 CNY/ton (+0.47%), while the international key refining project price difference is 1254.57 CNY/ton, with a week-on-week change of -43.45 CNY/ton (-3.35%) [2][3] - Brent crude oil's average price for the week ending December 26, 2025, is 61.73 USD/barrel, reflecting a week-on-week increase of +2.74% [2][3] - The refining sector is affected by geopolitical tensions, particularly regarding Venezuela and Russia, which have led to supply concerns and fluctuations in oil prices [2][15] - The chemical sector is experiencing weak demand, leading to a downward shift in chemical product prices [2][49] - Polyester production has seen a significant increase in sales volume, with downstream demand improving, which has positively impacted upstream prices [2][55] Summary by Sections Refining Sector - The report highlights the impact of geopolitical events on oil prices, with Brent and WTI crude prices at 60.64 and 56.74 USD/barrel respectively, showing slight increases [2][15] - Domestic refined oil prices have slightly decreased, with diesel, gasoline, and aviation kerosene averaging 6566.86, 7622.14, and 5716.07 CNY/ton respectively [2][15] Chemical Sector - The report notes a decline in demand for chemical products, with prices for polyethylene and EVA showing downward trends [2][55] - The average price for LDPE, LLDPE, and HDPE is reported as 9000.00, 6329.29, and 8000.00 CNY/ton respectively, with corresponding price differences from crude oil [2][55] Polyester & Nylon Sector - The polyester sector has seen a significant increase in production and sales, with a notable reduction in inventory levels and a slight increase in prices for polyester filament yarn [2][55] - The report indicates that the nylon filament prices remain stable, with slight improvements in price differences [2][55] Stock Performance - The report provides stock performance data for six major refining companies, with notable increases in stock prices for companies like Hengli Petrochemical (+11.01%) and Rongsheng Petrochemical (+12.12%) over the past week [2]

1. Report Industry Investment Rating - No relevant content provided 2. Core Viewpoints of the Report - This week, the asphalt futures market showed a wide - range oscillation. The international crude oil price rebounded due to the tense US - Venezuela relations, strengthening cost support and causing concerns about supply tightening at the raw material end, which supported the asphalt market. However, the weak fundamental situation of asphalt restricted the rebound height as the开工 rate and weekly output of domestic asphalt sample enterprises increased, and both factory and social inventories rose, indicating great pressure on downstream demand. In the future, with the expectation of supply surplus, there is significant pressure for continuous strengthening of crude oil. Although the tense US - Venezuela relations may cause disturbances, considering the substitution of domestic raw material sources, the actual impact may be limited, mainly reflected as a bullish sentiment, and the upward driving force is weak. It is expected that the market will continue to oscillate widely [8]. 3. Summary by Directory 3.1 Report Summary - **Market Focus**: The US has increased efforts to seize Venezuelan oil tankers; the negotiation of the Russia - Ukraine peace plan continues; the EIA data release is postponed to next week [7][8]. - **Key Data**: As of December 24, the domestic asphalt sample enterprise's开工率 was 31.3%, up 3.7 percentage points from the previous statistical period. As of December 26, the domestic asphalt weekly output was 55.3 tons, a week - on - week increase of 6.6 tons; the factory inventory of domestic asphalt sample enterprises was 59.7 tons, a week - on - week increase of 0.3 tons; the social inventory was 74.1 tons, a week - on - week increase of 2.7 tons [8]. - **Main Views**: The asphalt market is expected to continue wide - range oscillation. It is recommended to pay attention to the pressure near 3000 - 3050 yuan/ton of the BU2602 contract [8][9]. 3.2 Multi - Empty Focus - **Bullish Factors**: Disturbances at the raw material end; the implementation of winter storage policies provides a floor price support for the market [12]. - **Bearish Factors**: Weakening demand; a month - on - month increase in supply [12]. 3.3 Macroeconomic Analysis - **Initial Jobless Claims**: On December 24, the US Department of Labor reported that the number of initial jobless claims in the week ending December 20 dropped to 214,000, lower than the expected and previous value of 224,000, indicating no obvious pressure in the labor market [13]. - **Interest Rate Cut Expectations**: According to CME's "FedWatch", the probability of a 25 - basis - point interest rate cut by the Fed in January 2026 is 15.5%, and the probability of keeping the interest rate unchanged is 84.5%. By March next year, the probability of a cumulative 25 - basis - point cut is 42.2%, the probability of keeping the interest rate unchanged is 51.8%, and the probability of a cumulative 50 - basis - point cut is 6% [13]. - **Trump's Statement**: Trump hopes that the Fed chairman he nominates will cut interest rates when the economy is good [13]. - **US - Ukraine and US - Russia Meetings**: The US - Ukraine meeting in Miami from December 19 - 21 focused on a "20 - point peace plan" draft, and Zelensky confirmed the completion of the initial draft. The US - Russia meeting in Miami from December 20 - 21 was considered "productive and constructive". The market expects geopolitical risks to ease, and there are concerns that Russian oil inflow after a cease - fire agreement may exacerbate supply surplus and suppress oil prices [14]. 3.4 Supply - Demand Analysis - **Supply**: As of December 26, the domestic asphalt weekly output was 55.3 tons, a week - on - week increase of 6.6 tons, with a decrease in refineries and increases in Sinopec, CNPC, and local refineries. As of December 24, the domestic asphalt sample enterprise's开工率 was 31.3%, up 3.7 percentage points, mainly due to raw material disturbances, but it is expected to decline as the downstream is in the off - season. Supply is expected to remain at a low level for the year [16][24]. - **Demand**: As of December 26, the domestic asphalt weekly shipment volume was 40.4 tons, an increase of 5.4 tons from the previous statistical period, showing a phased rebound due to winter storage demand and refinery restarts, but still restricted by weak northern demand and high inventory. As of December 26, the domestic modified asphalt weekly capacity utilization rate was 7.1%, down 0.56 percentage points from last week, and it is expected to continue to decline seasonally [25][28]. - **Inventory**: As of December 26, the domestic asphalt sample enterprise's factory inventory was 59.7 tons, a week - on - week increase of 0.3 tons, with increases in East and South China and decreases in Shandong and Northwest China. The social inventory was 74.1 tons, a week - on - week increase of 2.7 tons, ending the destocking trend since August, indicating weakening downstream demand [34][42]. - **Spread**: As of December 26, the domestic asphalt processing dilution weekly profit was - 399 yuan/ton, a week - on - week increase of 16 yuan/ton. As of December 25, the domestic asphalt basis was 95 yuan/ton. As of December 24, the asphalt - to - crude oil ratio was 51.3. Due to strong oil prices, the cracking spread decreased, and the falling spot price led to a weaker basis, indicating pressure in the spot market [51]. 3.5 Market Outlook - The asphalt market is expected to continue wide - range oscillation. Geopolitical tensions and winter storage policies provide some support, but the supply - demand situation has not improved significantly. Supply pressure has increased, and inventories have risen. It is recommended to pay attention to the pressure near 3000 - 3050 yuan/ton of the BU2602 contract [53].

Core Viewpoint - The recent geopolitical tensions, particularly involving Ukraine and Russia, have influenced oil prices, with domestic SC crude oil rising by 2.2 yuan per barrel, approximately 0.5% [3][15]. Market Analysis - Domestic SC crude oil experienced a price increase, with a notable rise in high-sulfur fuel oil, which surged over 2% [3][15]. - The market reacted to news of Ukraine's missile strike on a major Russian oil facility, which is significant for fuel supply to Russian military forces [3][15]. - Despite the geopolitical tensions, Russian officials claim that they have replenished oil product inventories, which are reportedly higher than the previous year [3][15]. Geopolitical Context - Both China and Russia condemned the U.S. blockade against Venezuela, with Russia labeling it as a revival of "pirate behavior" [5][18]. - The geopolitical landscape continues to support oil prices, although the overall sentiment in the commodity market is optimistic, with a recent eight-day rise in the domestic commodity index [5][16]. - The oil market is expected to face resistance due to oversupply, with predictions of a sideways movement in oil prices for the remainder of the year [5][16]. Russian Energy Sector Developments - Russia's Deputy Prime Minister confirmed that Western sanctions have delayed the country's goal of producing 100 million tons of LNG by several years, indicating a significant setback in its LNG expansion strategy [6][17]. - Despite challenges in LNG projects, Russia is advancing its pipeline projects, particularly the "Power of Siberia 2" pipeline, highlighting its commitment to diversifying export routes [6][17]. - The Russian oil product market is reportedly balanced, with current inventories exceeding those of the previous year, suggesting resilience in its refining and supply chain amid sanctions [6][17]. U.S. Military and Economic Strategy - The White House has directed U.S. military focus towards enforcing sanctions on Venezuelan oil for at least the next two months, indicating a strategic shift towards economic pressure rather than immediate military action [8][19].

Report Industry Investment Rating - Crude oil: Volatile [1] Core Viewpoints - Supply-side still has some negative factors not fully priced in. High maritime inventories and OPEC+ idle capacity are key factors pressuring oil prices. Oil prices are expected to oscillate and bottom out while verifying the supply surplus. Global demand growth remains low. Low oil prices will accelerate the process of supply and demand finding a new balance, and oil prices are expected to show signs of a bottom reversal in H2 2026, with Brent crude expected to fluctuate between $55 - $80 per barrel [5] Summary According to the Table of Contents 2025 Oil Price Trend Review - Surplus Risk Continually Pressuring Oil Prices - In 2025, oil prices showed a volatile downward trend, with the average Brent crude price expected at $68 per barrel, a significant decrease of about $10 per barrel compared to the previous year. In early April, the US announced a reciprocal tariff policy, and OPEC+ unexpectedly accelerated exiting voluntary production cuts, worsening expectations for both supply and demand, causing the oil price fluctuation range to shift downward. In H2, as market concerns about the surplus intensified, the monthly spread gradually declined, and oil price volatility decreased compared to Q2. In Q3, tariff risks eased, and global onshore inventories did not accumulate significantly. Although OPEC+ continuously raised production targets, the surplus contradiction did not emerge during the peak demand season, and oil prices rebounded moderately. Since Q4, rising maritime crude inventories have intensified concerns about supply surplus, and the oil price center decreased significantly compared to the previous two quarters. Brent crude briefly fell below $60 per barrel at the end of the year. Geopolitical conflicts were frequent throughout the year, but without substantial supply losses, risk premiums mainly caused pulse-like oil price fluctuations [17] Geopolitical Conflicts Adding Supply Uncertainties, Limited Expectations of Supply Damage Russian Oil Procurement Facing New Obstacles, Attention on Establishing New Sales Channels - In 2025, Russia's oil supply remained resilient. Maritime crude oil exports averaged about 3.45 million barrels per day, a year-on-year decrease of 0.05 million barrels per day. Since July, due to attacks on refineries, Russia's crude oil exports were significantly higher than seasonal levels, but were expected to decline after November. Oil product exports decreased to the lowest level since 2021, averaging 2.25 million barrels per day in the first 11 months, a year-on-year decrease of 0.18 million barrels per day. Crude oil maritime exports were mainly to India, China, and Turkey, with volumes of 1.72 million, 1.19 million, and 0.32 million barrels per day respectively, all decreasing in November compared to the previous month. Oil product trade flows were more dispersed, mainly exported to Africa, Asia, and Turkey, with a small amount to South America [20] - In October 2025, the UK and the US successively announced sanctions on two major Russian oil companies, Rosneft and Lukoil, and their subsidiaries. On October 23, the EU passed the 19th round of sanctions against Russia. Before finding ways to avoid sanctions, buyers usually reduce purchases from sanctioned Russian entities. The market is concerned about the progress of Russia-Ukraine peace talks and has not priced in the scenario of the US fully restricting Russian oil exports, as it would lead to a significant increase in oil prices, contrary to the Trump administration's goal of maintaining low oil prices [22] - Russia's oil supply is concentrated in four major companies. In 2024, Rosneft and Lukoil's crude oil production was expected to be 4.88 million barrels per day, accounting for 46% of Russia's total production. Their combined crude oil exports were 1.7 million barrels per day, and oil product exports were 0.87 million barrels per day. Currently, Russia's top four oil companies have all been included in the US sanctions list. After Gazpromneft and Surgutneftegaz were sanctioned in January, their direct crude oil exports gradually decreased to less than 1%. Some new exporters entered the market, with exports exceeding 1 million barrels per day from October to November, indicating the market's ability to adapt to sanctions and maintain trade flows. It is expected that more Russian oil exports will be carried out by non-sanctioned entities or newly established exporters in the future [23] - India and Turkey are sensitive to US sanctions. India is one of the largest buyers of Russian oil, with Russian oil accounting for about 36% of India's total oil imports, and about 70% from sanctioned entities. After the US imposed a 25% tariff on India in July, some Indian state-owned refineries reduced purchases from Russia, but the reduction was small. After the EU and US upgraded sanctions, Reliance said it would cut Russian oil imports and cancel long-term contracts with Rosneft. Nayara refinery, which has mainly relied on Russian oil since being sanctioned by the EU in July, is expected to maintain imports of about 0.4 million barrels per day. It is expected that about 0.8 - 1 million barrels per day of supply needs to switch sellers. Although establishing new channels takes time and there is a short-term risk of supply reduction, the market generally expects that Russia-India trade flows will recover with the entry of new exporters [27] - Turkey imports about 0.3 million barrels per day of Russian oil, accounting for about 50% of its total imports, and about 80% from Lukoil and Rosneft. Turkey has also increased imports of diesel and other oil products from Russia since the Russia-Ukraine conflict. Turkey is also subject to the EU's 18th round of sanctions on oil product raw materials, so there is a high risk of a reduction in Turkish imports of Russian oil. A significant decrease in Turkish imports of Russian oil was observed in November [28] - China can absorb some sanctioned oil, but there are obstacles to adjusting trade flows, such as high logistics costs and low cracking profitability of certain oil types. The potential buyers of sanctioned oil are mainly independent refineries. Based on rough calculations of shipping data, the average known non-state-owned arrival volume at Shandong ports in the first 10 months of this year was about 2.15 million barrels per day, with sensitive oil arrivals totaling nearly 1.53 million barrels per day. If the group of Russian oil buyers continues to be restricted, the space for trade flow adjustment will be limited [30] Buyer Limitations and Reduced Transportation Efficiency Causing Floating Storage Inventory to Rise - Since September, floating storage inventory has been rising. As of the third week of December, the inventory of crude oil floating at sea for at least 20 days reached 56 million barrels, the highest since March 2023. Currently, floating storage is mainly composed of sanctioned oil from Iran and Venezuela, possibly due to buyers' lack of quotas at the end of the year and reduced transportation efficiency. With the increasing impact of EU and US sanctions on Russia, the volume of Russian crude oil in transit increased significantly in December, and there is a high possibility that it will turn into floating storage [33] - Iran's supply has been stable, with an average crude oil production of nearly 3.3 million barrels per day and an average export volume of 1.7 million barrels per day in the first 11 months, an increase of 0.12 million barrels per day compared to last year. The conflict in June did not have a continuous impact on Iran's supply. Although exports decreased slightly from June to August, they reached a new high of over 1.9 million barrels per day in September. However, the US has repeatedly expanded sanctions on Iranian oil buyers, ports, and shadow fleets, reducing transportation efficiency and constraining buyers' digestion capacity. The average arrival volume in China decreased by 0.32 million barrels per day compared to the previous year, leading to an increase in floating storage inventory. Compared to the floating storage level of about 70 million barrels in 2022, Iran's current floating storage inventory is nearly 32 million barrels, which may still increase. If buyers' digestion speed cannot improve, high floating storage inventory may restrain exports [34] - Venezuela's average crude oil production is 0.93 million barrels per day, slightly increased compared to last year, and its average export volume is 0.77 million barrels per day, an increase of 0.11 million barrels per day. The increase in Venezuela's floating storage inventory is related to the reduction in exports to the US. After the US government temporarily suspended Chevron's operating license in May, exports to the US were interrupted. Although exports resumed in August, they did not reach previous peaks. Tensions between the US and Venezuela may cause short-term export volume decline, but the medium- to long-term risk of supply interruption is relatively low. However, supply constraints will limit the further increase in export volume [35] - The potential buyers of sanctioned oil floating storage are limited to a relatively fixed group. As maritime inventory continues to rise, price competition for sensitive oil has become more intense. The landed cost discount of Russian ESPO crude oil has significantly weakened to -$7.5 per barrel after the escalation of sanctions to attract buyers. The small amount of new crude oil import quotas issued by China at the end of the year may boost short-term import demand. However, due to the threat of sanctions, ports have strengthened supervision of shadow fleets, slowing down the unloading speed and limiting the digestion of floating storage [36] High Maritime Inventory Intensifying Supply Surplus Risk, Low Prices Potentially Driving Down Growth Potential OPEC+ Idle Capacity Concentrated in Saudi Arabia, Low Prices May Lead to Policy Shift - OPEC+ began to exit voluntary production cuts in April and increased the production target by a total of 2.88 million barrels per day by the end of the year. The production target of the eight voluntary production-cutting countries in December rose to 33.29 million barrels per day. OPEC+ decided to suspend production increases in Q1 2026 at its November and December meetings, indicating a cautious view on short-term market supply and demand [42] - According to OPEC monthly reports, the production of the eight voluntary production-cutting countries rebounded to 32.96 million barrels per day in November, an increase of nearly 2 million barrels per day compared to March, but lower than the increase in the production target. Iraq's production growth was relatively small, and Russia's production increased slightly after September, but both countries' production was about 0.12 million barrels per day lower than the target on average, partially fulfilling compensatory production cuts. Kazakhstan's production increased significantly at the beginning of the year and remained at a high level of 1.84 million barrels per day in most months. However, production decreased from October to November, and the average overproduction scale decreased from 0.33 million barrels per day to 0.16 million barrels per day, mainly due to oilfield maintenance and pipeline attacks. Other voluntary production-cutting countries steadily increased production and were close to their production targets. Among non-voluntary production-cutting countries, Nigeria and Libya's production remained at a high level since 2022, with average production of 1.5 million and nearly 1.3 million barrels per day respectively [43] - The cumulative scale of OPEC+'s compensatory production cuts updated in December was still as high as 4.59 million barrels per day. In several updates this year, the total amount of compensatory production cuts decreased only slightly, indicating that compensatory production cuts have limited binding force on actual production, mainly because Kazakhstan's continuous overproduction offset the production reduction of other countries. The compensatory production cut scale of Iraq, the UAE, Oman, and Russia decreased from 3.27 million barrels per day in April to 1.23 million barrels per day in December, and the actual effect of future compensatory production cuts may still be limited [44] - The impact of OPEC+'s production increase on export volume changes was lagging. From April to August, export volume increased only slightly month-on-month and did not cause a supply shock to the market. However, since September, OPEC+'s export volume has increased significantly. The average export volume of the eight voluntary production-cutting countries from September to November was 21.55 million barrels per day, an increase of about 1.4 million barrels per day compared to the average of the previous eight months. Saudi Arabia's export volume rebounded to around 6.6 million barrels per day, contributing the most to the increase. Russia's export volume increased periodically, but sanctions and attacks on energy facilities added uncertainties. Iraq's average export volume in the first 11 months was 3.34 million barrels per day, slightly lower than the previous year. Exports through the Ceyhan terminal resumed in October after a two-year interruption, but the current export volume is only about 0.2 million barrels per day, half of the normal level, hindering production increase. With the increase in OPEC+'s export volume, the global volume of crude oil in transit at sea has increased significantly. In the short term, a decrease in Middle Eastern refinery processing volume and a decrease in exports from some regions due to sanctions or conflicts are expected to be more conducive to maintaining high export volumes of other alternative oil types in the Middle East [48] - Saudi Arabia has the highest remaining idle capacity, with a potential production increase of about 1.5 million barrels per day based on its historical maximum production. Other members' theoretical idle capacity is relatively low. In terms of production growth potential, Saudi Arabia's high idle capacity and strict historical compliance rate give it high growth potential in the future. Other members are approaching or exceeding their production capacity limits, weakening their further production growth potential. Therefore, future OPEC+ production policy decisions will depend more on Saudi Arabia's willingness to increase production and its bottom line for oil prices. After continuous production increases by OPEC+ and non-OPEC+ countries this year, most supply increments have been realized. As the production growth potential of competitors approaches a bottleneck, Saudi Arabia's urgency to increase production has decreased, and its demand to maintain relatively stable oil prices may increase. If oil prices weaken further due to surplus expectations, there is a higher possibility of an OPEC+ policy shift, which will support oil prices [49] US Production Increase Relying on Efficiency Improvement, Low Oil Prices Constraining Production Growth Potential - According to EIA data, the average US crude oil production in the first three quarters was 13.52 million barrels per day, an increase of 0.31 million barrels per day compared to last year. Monthly production continued to reach new highs, with an expected production of 13.84 million barrels per day in October. Falling oil prices have significantly constrained upstream producers' capital expenditure willingness. The number of US oil rigs decreased significantly from late April to early August and then stabilized. As of the second week of December, the number of Baker Hughes oil rigs fluctuated between 410 - 420, a decrease of about 15% from the high point this year. The number of fracturing equipment decreased year-on-year until September and then rebounded slightly, fluctuating between 173 - 179, a decrease of about 18% from the high point [52] - In this US production increase cycle, the peak number of rigs occurred at the end of December 2022, and then the number decreased. Although the decrease in rigs weakens production growth potential, US production has still increased, albeit at a slower rate in the past two years, indicating that current production increases mainly rely on efficiency improvement. Currently, efficiency improvement is mainly reflected in the increase in rig use efficiency, showing that producers are more focused on optimizing capital use efficiency to control capital expenditure in a low oil price environment. According to EIA data, the crude oil production per new well per rig in the Permian shale oil region in the first three quarters increased by 11% compared to the average in 2024. The initial production per unit horizontal well of new wells in the two core Midland and Delaware blocks decreased in the first half of the year compared to last year. Since 2023, the unit production efficiency of the two core blocks has declined, indicating that there is a bottleneck in further improving the production efficiency of existing production areas [58] - Productivity data in shale oil regions show that the number of DUC wells in the Permian region is still gradually decreasing, which can supplement the number of completed wells to some extent when the number of rigs decreases. According to calculations, in two sub-blocks of the Permian, about 50% of unproduced wells are expected to have a break-even price of less than $60 per barrel. Other blocks have higher break-even prices. Therefore, if oil prices fall further, the economic advantage of Permian wells is beneficial for maintaining stable production, while the risk of production cuts in other blocks increases. However, research shows that in major oil-rich regions, after years of development, the gas-oil ratio of new wells has been continuously rising, which may be due to the decline in reservoir pressure in mature production areas, which is more conducive to natural gas recovery and may affect the well decline rate. Therefore, it is more difficult for producers to maintain production. Under capital expenditure constraints, production growth potential may be further constrained [60] - Considering the expected break-even price of about $60 per barrel for large producers in 2025 and the rapid decrease in the number of rigs after the oil price decline in Q2, shale oil producers are highly sensitive to medium-term oil prices. Therefore, without the expectation of a significant increase in the oil price center, producers' willingness to significantly increase capital expenditure remains low, and the situation of limited US production growth potential has not shown signs of reversal. Thanks to the contribution of efficiency improvement to production increase, the EIA has raised its forecast for US crude oil production growth in 2025 to 0.38 million barrels per day and expects a decrease of 0.08 million barrels per day in 2026. However, given the short investment cycle of shale oil and its sensitivity to oil prices, if oil prices rise significantly in the future and are higher than the break-even price, the willingness to increase capital expenditure will increase US production growth potential, and the US production forecast may need to be revised upwards [62] South American Production Peak Has Passed, Expected Significant Decline in YoY Growth Rate in H2 2026 - The IEA expects the total global upstream oil and gas investment in 2025 to be about $570 billion, a 4% decrease compared to the previous year. Since 2020, although the oil price center has been higher than in the previous cycle, upstream capital expenditure has

1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints - For the nickel market, influenced by Indonesian policy changes, the bullish sentiment is high, and nickel prices are expected to maintain an overall rebound trend. However, high inventory and oversupply in the fundamentals will drag down the rebound strength [3]. - For the stainless - steel market, although the weak supply - demand situation has not changed fundamentally, short - term cost support and technical strength provide price resilience. Investors should pay attention to the implementation progress of Indonesian policies and inventory changes to seize the opportunity of oscillating upward [6]. 3. Summary by Related Catalogs Nickel Variety Market Analysis - **Futures**: On December 24, 2025, the main contract 2602 of Shanghai nickel opened at 120,280 yuan/ton and closed at 123,440 yuan/ton, a 3.92% change from the previous trading day's close. The trading volume was 386,986 (+190,610) lots, and the open interest was 134,454 (+21,822) lots. It showed a strong and volatile trend with significant capital inflow, driven by the expectation of Indonesian quota contraction and external market, but restricted by high inventory and differences between long and short positions. The continuous weakening of the US dollar increased the attractiveness of commodities, while weak consumption and high inventory limited the rebound strength [1]. - **Nickel Ore**: The trading atmosphere in the nickel ore market was fair, and prices remained stable overall. In China's southern region, 1.3% nickel ore was traded at CIF $39.5. In the Philippines, the 1.3% nickel ore tender at the northern Benguet mine was settled at FOB $33.5, with a price increase. Considering rainfall, the shipping efficiency was fair. Downstream iron plants were still in losses, and their attitude of pressing prices for raw material nickel ore purchases might ease. In Indonesia, the second - phase domestic trade benchmark price in December dropped by $0.11 - $0.18 per wet ton, and the current mainstream premium was +25, with a premium range of +25 - 26, expected to remain flat [1]. - **Spot**: Jinchuan Group's sales price in the Shanghai market was 133,800 yuan/ton, up 5,400 yuan/ton from the previous trading day. Nickel prices rose significantly, and spot trading was weak. The spot premiums of refined nickel brands decreased slightly. The premium of Jinchuan nickel changed by - 150 yuan/ton to 6,750 yuan/ton, the premium of imported nickel remained unchanged at 400 yuan/ton, and the premium of nickel beans was 2,450 yuan/ton. The previous trading day's Shanghai nickel warehouse receipt volume was 38,621 (-301) tons, and the LME nickel inventory was 254,604 (+216) tons [2]. Strategy - **Unilateral**: Mainly conduct range operations [4]. - **Inter - delivery**: None [4]. - **Inter - variety**: None [4]. - **Futures - spot**: None [4]. - **Options**: None [4]. Stainless - Steel Variety Market Analysis - **Futures**: On December 24, 2025, the stainless - steel main contract 2602 opened at 12,920 yuan/ton and closed at 12,905 yuan/ton. The trading volume was 168,990 (-497) lots, and the open interest was 100,771 (-4,171) lots. It showed a mild rebound with increasing volume and price, and the fluctuation was relatively stable, consistent with the strong continuation of Shanghai nickel's sharp rise the previous day [4]. - **Spot**: The futures market weakened, and downstream purchasing enthusiasm was low, mainly purchasing on - demand. Inventory depletion slowed down. The stainless - steel price in the Wuxi market was 13,050 (+75) yuan/ton, and in the Foshan market, it was 13,025 (+75) yuan/ton. The 304/2B premium was 100 - 350 yuan/ton. The ex - factory tax - included average price of high - nickel pig iron changed by 4.00 yuan/nickel point to 893.0 yuan/nickel point [4][5]. Strategy - **Unilateral**: Buy on dips [6]. - **Inter - delivery**: None [6]. - **Inter - variety**: None [6]. - **Futures - spot**: None [6]. - **Options**: None [6].