1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Interest rates and exchange rates: The Fed will stop balance - sheet reduction on December 1st. There is a possibility of dollar liquidity drying up and risks in dollar - denominated asset prices. The initial conclusion of Sino - US trade negotiations has short - term positive impacts on domestic risk appetite, increasing the demand for RMB financial asset allocation [83]. - Commodities: Short - term bearish on commodities due to trade war impacts, but considering cost improvements, China's petrochemical industry chain has cost - competitive advantages [83]. - Equities: Bullish on domestic consumption recovery (towards cost - effectiveness) and self - controllable industrial chains [83]. - Steady growth in offshore oil and gas exploration: The offshore oilfield service industry is expected to maintain stable capital expenditure, with continuous efforts in increasing oil and gas reserves and production in China. Bullish on listed oilfield service companies with low valuations, large overseas market potential, and internationally advanced technologies, such as CNOOC Engineering, COSL, and Bohai Machinery [83]. - Cost advantages of refining and petrochemical integration: Bullish on companies with strong hydrocracking capabilities and integrated refining - PX - PTA industrial chains, such as Hengli Petrochemical, Rongsheng Petrochemical, and Tongkun Group [83]. - Cost - comparative advantages: The negative impact of ethane imports is expected to be repaired, benefiting previously oversold domestic stocks, such as Satellite Chemical and Wanhua Chemical, as well as natural - gas - related stocks, such as ENN Energy and Jiufeng Energy [83]. 3. Summary by Related Catalogs 3.1 Oil Price Outlook - Oil price judgment: In October 2025, Brent crude oil maintained wide - range fluctuations with a lower central price, closing at around $65.07 per barrel at the end of the month. OPEC+ countries that previously implemented voluntary production cuts agreed to increase production by 137,000 barrels per day in November and December respectively. The market bets that the Fed may cut interest rates by at least 25 basis points in December 2025. With the easing of the Israel - Palestine conflict and the preliminary Sino - US trade agreement, the short - term impact of geopolitical factors is weakening. The oil demand is weak, and the main support for oil prices lies in the uncertainty of Sino - US trade. It is expected to fluctuate between $50 - 70 per barrel in Q4 2025. The risk of downward oil price fluctuations has increased in the short term [3]. - Forecasts from different institutions: EIA predicts that the average annual price of Brent crude oil will be $69 per barrel in 2025 and $52 per barrel in 2026; IFA, OPEC, OIES, Rystad Energy also have their own forecasts for global oil supply, demand, and price in 2025 - 2026 [5]. 3.2 Global Oil Supply and Demand - Global oil supply: OPEC's eight countries agreed to increase the total production quota by 137,000 barrels per day in December and decided to suspend production increases in Q1 2026 due to seasonal factors [3]. - Global economic (oil demand): In October, the processing volume of US refineries decreased month - on - month and was lower than the same period last year, and the commercial crude oil inventory decreased month - on - month, about 5.91% lower than the five - year average. China's crude oil consumption increased year - on - year, and imports improved. In September 2025, the crude oil processing of China's above - scale industries increased by 6.8% year - on - year, and imports increased by 3.8% year - on - year [3]. 3.3 Economic Cycle and Inflation - Economic cycle: As of October 31, 2025, the yield of the US 10 - year Treasury bond was about 4.11%. The Fed will stop balance - sheet reduction on December 1st, and the market expects another interest - rate cut in December [3]. - Inflation pressure: In August, the US PPI (all commodities) increased by 2.7% year - on - year, PPI (final demand) increased by 2.6% year - on - year, and decreased by 0.5 percentage points month - on - month. The PCE price index increased by 2.74% year - on - year, with a previous value of 2.60% [3]. 3.4 Geopolitical and New Discoveries - Geopolitical factors: The geopolitical situations between Russia and Ukraine, and between Russia and Europe continue to deteriorate; there is still uncertainty in Sino - US trade conflicts; the US foreign policy is fickle [3]. - New discoveries: Uganda plans to start oil production in July 2026; Brazil's IBAMA allows exploration drilling in the FZA - M - 59 block in the Amazon Estuary Basin [3]. 3.5 Inventory and Downstream Profits - Global inventory: As of the week of October 24, 2025, the US commercial crude oil inventory was 416 million barrels, 9.54 million barrels less than the same period last year, and about 5.91% lower than the five - year average. Gasoline and distillate inventories also decreased compared to the same period last year [3]. - Downstream profits: The spread between RBOB gasoline futures and WTI crude oil futures in the US has significantly improved in the past two months, rising above the 2022 - 2024 average of $37.4 per barrel and higher than the 20 - year historical average [3]. 3.6 Manufacturing and Related Energy - Manufacturing PMI: In October 2025, China's manufacturing PMI was 49.0, down 0.8 percentage points from the previous month. The US ISM manufacturing PMI in October was 48.7, maintaining the contraction trend of the previous month [3]. - Related energy: The spot price of Henry Hub natural gas is expected to rise from an average of $3 per million British thermal units in September to $4.10 per million British thermal units in Q1 2026, mainly reflecting the growth of US production [3]. 3.7 Petrochemical Industry Chain - Naphtha cracking ethylene spread: In October, the spread was $134.2 per ton, down $11 per ton month - on - month [56]. - Polyester filament industry: In October, after the holiday, manufacturers quickly accumulated inventory. Later, with the increase in demand for winter fabrics, the polyester filament market improved, and the inventory decreased significantly. The production capacity of polyester filament was adjusted to 42.375 million tons per year, and the operating rate in October was about 91% [66]. - PTA market: In October 2025, the PTA market was under pressure, and the processing fee remained low. In September, China's apparent PTA consumption was about 5.6779 million tons, and the production was about 6.0205 million tons [70].

Core Viewpoint - CNOOC's stock price increased by over 4% during trading, reflecting market response to its recent financial performance announcement, despite a decline in oil and gas sales revenue and net profit [1] Financial Performance - For the first three quarters of 2025, CNOOC reported oil and gas sales revenue of approximately RMB 255.48 billion, a year-on-year decrease of 5.9% primarily due to falling oil prices [1] - The net profit attributable to shareholders reached RMB 101.97 billion, down 12.6% year-on-year [1] - In Q3, the net profit was RMB 32.4 billion, a 12% decline year-on-year and a 2% decline quarter-on-quarter, although it exceeded expectations by 6% due to higher-than-expected trading profits [1] Production and Exploration - CNOOC made five new discoveries in Chinese waters and successfully evaluated 22 oil and gas structures in the first three quarters [1] - Four new projects were put into production in Q3, including the Kenli 10-2 oilfield group (Phase I), Dongfang 1-1 gas field 13-3 area, Wenchang 16-2 oilfield, and Guyana's Yellowtail [1] - Capital expenditures for the first three quarters totaled RMB 86 billion, a 10% decrease year-on-year, with exploration, development, and production capital expenditures at RMB 14.4 billion, RMB 53.2 billion, and RMB 17.5 billion, reflecting year-on-year changes of +4%, -14%, and -3% respectively [1]

Core Insights - Oil prices have experienced a significant reversal after four consecutive months of decline, with an expected increase of 0.12 yuan per liter starting November 10 [1][3][5] - The recent surge in international oil prices, particularly WTI reaching $60.98 per barrel and Brent at $65.07 per barrel, has contributed to the anticipated domestic price hike [3][5] Price Trends - After a series of price drops totaling over 0.50 yuan per liter, 92 gasoline prices fell to around 6.5 yuan per liter, providing relief to consumers [1][3] - The current expected increase of 140 yuan per ton translates to an additional cost of approximately 6 yuan for a full tank of gas [4][5] Regional Price Variations - Gasoline prices vary across different regions, with 92 gasoline prices ranging from 6.63 yuan per liter in Xinjiang to 7.95 yuan per liter in Hainan [4][6] - The lowest recorded price for 92 gasoline was 6.3 yuan per liter in Guangdong, compared to a high of 7.2 yuan per liter earlier in the year [3][4] Economic Implications - Rising oil prices are likely to impact logistics and consumer goods prices, potentially leading to increased costs for services like delivery and food [4][5] - The volatility in oil prices reflects broader issues in the energy market, raising concerns among consumers about the stability of fuel costs [5]

Investment Rating - The report maintains a "Buy" rating for both A and H shares of the company, with target prices set at RMB 33.41 and HKD 27.04 respectively [2][6][8]. Core Insights - The company reported a revenue of RMB 312.5 billion for the first three quarters, a year-on-year decrease of 4%, and a net profit attributable to shareholders of RMB 102 billion, down 13% year-on-year [2]. - The third quarter saw a revenue of RMB 104.9 billion, with a quarter-on-quarter growth of 6% and a year-on-year decline of 4% [2]. - The decline in net profit was attributed to the depreciation of the US dollar against the RMB and lower-than-expected oil production due to typhoons and asset sales in the Gulf of Mexico [2]. - The company has shown resilience against oil price fluctuations, with effective cost reduction and quality improvement measures [2]. Revenue and Production - The company's oil and gas net production reached 578.3 million barrels of oil equivalent, a year-on-year increase of 6.7%, with oil liquid and gas production growing by 5.4% and 11.6% respectively [3]. - Brent crude oil prices averaged USD 68.2 per barrel in Q3, down 13.4% year-on-year, while the company's realized oil price was USD 66.2 per barrel, a decrease of 12.8% [3]. - The overall gross margin decreased by 2.2 percentage points year-on-year to 52.2%, with Q3 gross margin at 49.8% [3]. Market Conditions - Oil prices have entered a downward trend due to the end of the peak season and increased supply from OPEC+, with WTI and Brent crude prices reported at USD 60.48 and USD 64.92 per barrel respectively [4]. - The report predicts that global oil supply will face excess pressure, particularly from the Middle East, starting in Q4 2025 [4]. Capital Expenditure and Projects - The company completed capital expenditures of RMB 86 billion in the first three quarters, a decrease of 10% year-on-year, with significant progress in key projects [5]. - New discoveries and projects have been successfully evaluated and put into production, contributing to future growth [5]. Profit Forecast and Valuation - The net profit forecast for 2025-2027 has been adjusted downwards to RMB 128 billion, RMB 122.9 billion, and RMB 129.6 billion respectively, reflecting a decrease of 3.3%, 2.6%, and 1.9% from previous estimates [6]. - The report assigns a price-to-earnings ratio of 12.9x for 2026, with target prices reflecting the company's high oil production ratio and sensitivity to oil price changes [6].

Investment Rating - The investment rating for the company is "Buy" with a target price not specified [8]. Core Views - The company's Q3 2025 net profit was 32.4 billion, which met expectations, while revenue reached 104.9 billion, showing a year-on-year increase of 5.7%. However, net profit decreased by 12.16% year-on-year [1]. - The total oil and gas production in Q3 2025 was 194 million barrels of oil equivalent (mmboe), reflecting a year-on-year increase of 7.9%, with oil and gas production increasing by 7.1% and 10.4% respectively [2]. - The cost per barrel of oil for Q1-Q3 2025 was $27.35, a decrease of $0.79 year-on-year, but there was a slight increase of $1.31 per barrel in Q3 due to production declines caused by typhoons [3]. - The realized oil price in Q3 2025 was $66.62 per barrel, with a discount of $1.6 compared to Brent, showing a year-on-year narrowing of the discount but a slight widening compared to the previous quarter. The realized natural gas price remained stable at 1.96 yuan per cubic meter [4]. - Operating cash flow for Q1-Q3 2025 was 171.7 billion, down 6% year-on-year, while capital expenditure was 86 billion, down 10% year-on-year, with a full-year capital expenditure plan of 125-135 billion [5]. Financial Data Summary - The company's projected net profits for 2025, 2026, and 2027 are 128.3 billion, 133.1 billion, and 135.8 billion respectively, corresponding to a price-to-earnings (P/E) ratio of 10 and 6.9 times based on the stock price as of October 30, 2025. The dividend yield is projected at 4.5% and 6.6% for 2025 [5]. - The financial data for the years 2023 to 2027 shows a projected revenue of 404.9 billion in 2025, with a growth rate of -3.72%. The EBITDA for 2025 is estimated at 278.6 billion, with a net profit of 128.3 billion [6]. - The company's earnings per share (EPS) for 2025 is projected to be 2.70 yuan, with a P/E ratio of 10.01 and a price-to-book (P/B) ratio of 2.73 [6].

Group 1: Report Industry Investment Rating - No relevant content provided Group 2: Core Viewpoints of the Report - In October, the marginal weakening of asphalt supply and demand and raw material risks jointly affected prices. In the first half of October, the sharp decline in oil prices under macro - risks significantly affected the cost of asphalt negatively. The demand weakened month - on - month at the end of the peak season, while supply remained high, increasing the inventory pressure in the industry chain and pressuring the spot price. In the second half of October, oil prices were strong, and the news of potential US actions against Venezuela affected asphalt costs, but the supply - demand situation continued to weaken in the fourth quarter, and the spot price stopped falling but lacked continuous upward momentum. In the future, oil prices will fluctuate, and there is no further positive support for the cost side in the short term. The supply - demand situation will gradually weaken quarter - on - quarter in the fourth quarter, and the spot price lacks continuous upward momentum. The supply side will remain high due to previous high profits, and the inventory pressure in the industry chain is expected to materialize in November. The short - term spot price will be weak, and the futures price is expected to fluctuate weakly [4][5][40] Group 3: Summary of Each Section 1. Preface and Overview - **Market Review**: In October, the marginal weakening of asphalt supply and demand and raw material risks affected prices. In the first half, macro - risks led to a sharp decline in oil prices, negatively affecting asphalt costs. Demand weakened month - on - month at the end of the peak season, supply remained high, and inventory pressure increased, pressuring the spot price. In the second half, oil prices were strong, and the news of potential US actions against Venezuela affected asphalt costs. The supply - demand situation continued to weaken in the fourth quarter, and the spot price stopped falling but lacked continuous upward momentum [4] - **Market Outlook**: Oil prices will fluctuate, and there is no further positive support for the cost side in the short term. The supply - demand situation will gradually weaken quarter - on - quarter in the fourth quarter, and the spot price lacks continuous upward momentum. The supply side will remain high due to previous high profits, and the inventory pressure in the industry chain is expected to materialize in November. The short - term spot price will be weak, and the futures price is expected to fluctuate weakly [5] - **Strategy Recommendation**: Short - term: For single - side trading, stay on the sidelines; for arbitrage, stay on the sidelines; for options, sell out - of - the - money put options on the BU2601 contract [6] 2. Fundamental Situation - **Market Review**: Similar to the preface, in October, the marginal weakening of asphalt supply and demand and raw material risks affected prices. In the first half, macro - risks led to a sharp decline in oil prices, negatively affecting asphalt costs. Demand weakened month - on - month at the end of the peak season, supply remained high, and inventory pressure increased, pressuring the spot price. In the second half, oil prices were strong, and the news of potential US actions against Venezuela affected asphalt costs. The supply - demand situation continued to weaken in the fourth quarter, and the spot price stopped falling but lacked continuous upward momentum [11] - **Supply Overview**: From January to September 2025, China's asphalt production was 20.95 million tons, a year - on - year increase of 2.26 million tons or 12%. In September, the domestic refinery asphalt production was 2.79 million tons, a month - on - month increase of 0.26 million tons and a year - on - year increase of 0.8 million tons. From January to August 2025, asphalt imports were 2.375 million tons, a year - on - year decrease of 0.203 million tons (- 7.9%). In September, imports were 0.342 million tons, a month - on - month increase of 0.073 million tons and a year - on - year increase of 0.137 million tons. From January to September, imports were 2.717 million tons, a year - on - year decrease of about 0.066 million tons (- 2.4%) [15][16] - **Demand Overview**: In October 2025, domestic asphalt demand was weak. In the north, demand declined after a brief pre - holiday rush due to cooling and rain. In the south, demand was slow to release due to typhoons, rain, and capital constraints. Only a small amount of demand was supported in southern Xinjiang and parts of the southwest. Refinery shipments were at a low level, and terminal demand showed that the road modified asphalt start - up rate was slowly rising but still at a low level, while the waterproofing membrane start - up rate decreased to the lowest level [28] - **Inventory and Valuation**: In October 2025, domestic asphalt refinery inventories increased overall. Social inventories decreased overall, with a significant difference in the inventory consumption rhythm between the north and the south. The asphalt processing profit increased by about 25 yuan/ton compared to September, and the diluted asphalt premium decreased by 1.7 to - 8.2 US dollars/barrel. The basis in Shandong decreased by 35 yuan/ton to 171 yuan/ton, the basis in South China increased by 15 yuan/ton to 101 yuan/ton, and the basis in East China increased by 25 yuan/ton to 81 yuan/ton [30][33] 3. Future Outlook and Strategy Recommendation - **Future Outlook**: Oil prices will fluctuate, and there is no further positive support for the cost side in the short term. The supply - demand situation will gradually weaken quarter - on - quarter in the fourth quarter, and the spot price lacks continuous upward momentum. The supply side will remain high due to previous high profits, and the inventory pressure in the industry chain is expected to materialize in November. The short - term spot price will be weak, and the futures price is expected to fluctuate weakly [40] - **Strategy Recommendation**: Short - term: For single - side trading, stay on the sidelines; for arbitrage, stay on the sidelines; for options, sell out - of - the - money put options on the BU2601 contract [40]

Report Industry Investment Rating - No information provided regarding the report industry investment rating Core View of the Report - The outcome of the Sino-US talks met market expectations, had no significant impact on oil prices, and did not reach a comprehensive trade agreement. It only reached agreements on issues such as fentanyl, tariff extensions, and soybean purchases, without addressing core issues like Russian oil procurement and US crude oil procurement, thus having limited impact on oil prices [2] Summary by Relevant Catalogs Market News and Important Data - The price of light crude oil futures for December delivery on the New York Mercantile Exchange rose 9 cents to $60.57 per barrel, a 0.15% increase; the price of Brent crude oil futures for December delivery rose 8 cents to $65.00 per barrel, a 0.12% increase. The main SC crude oil contract closed down 0.24% at 461 yuan per barrel [1] - Saudi Arabia's fiscal deficit in the third quarter widened to 88.5 billion riyals ($23.6 billion), a 160% increase from the previous quarter. Oil revenue decreased by 0.1% to 150.8 billion riyals due to OPEC's phased removal of production cuts. Total revenue decreased by about 13% year-on-year to 269.9 billion riyals, with 119.1 billion riyals from non-oil industries. Public spending increased by 6% year-on-year to 358.4 billion riyals [1] - Russia's second-largest oil producer, Lukoil, agreed to sell most of its international assets to Swiss commodity trader Gunvor after being sanctioned by the US. The transaction will cover most of Lukoil's overseas operations with about 15,000 employees [1] - Ukrainian security officials said that Ukraine attacked two oil storage facilities in Russian-occupied Crimea [1] - ANZ Bank expects OPEC+ to approve an additional supply increase of 137,000 barrels per day in December due to increased risks to Russian supply. The bank raised its 0 - 3 month crude oil price target to $70 per barrel [1] - India's HMEL company has suspended further purchases of Russian crude oil [1] Investment Logic - The previous day's meeting between the two heads of state basically met market expectations, had no unexpected surprises, did not reach a comprehensive trade agreement, and had limited impact on oil prices [2] Strategy - Oil prices will fluctuate within a short - term range and a medium - term short position should be considered [3]

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]

Report Overview - Report Title: Crude Oil and Refined Oil Morning Report - Report Date: October 30, 2025 - Research Team: Energy and Chemicals Team of the Research Center 1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints of the Report - This week, oil prices rebounded significantly, with Brent crude closing above $65. The US imposed sanctions on major Russian oil producers, and India's Reliance Group will stop importing Russian oil under long - term agreements, which may lead to a near - zero supply of Russian oil to India in the short term. The reduction in Russian crude exports still needs to be evaluated, but Indian purchases have supported the Dubai market in the short term [6]. - Geopolitical concerns were triggered by the US's controversial military strike on Venezuelan transportation. Fundamentally, as of October 17, EIA crude oil inventories decreased by 961,000 barrels, US refinery operations rebounded, and the US Energy Department announced a tender to buy 1 million barrels of crude oil for the strategic reserve. Gasoline and diesel inventories decreased, showing a warming in fundamentals [6]. - Due to concerns about India's diesel exports, the crack spreads of European and American diesel strengthened, but the inventory of Singapore diesel increased by more than 5 million barrels, reaching a 243 - week high, suppressing the global diesel crack spread. In the short term, oil prices may rebound and fluctuate more, and in the medium term, the upside space of oil prices is limited due to Kuwait's statement that OPEC is ready to increase production. The oversupply situation in the fourth quarter continues, and caution is advised when chasing high prices [6]. 3. Summary by Related Catalogs 3.1 Oil Price Data - From October 23 to October 29, WTI crude oil prices changed from $61.79 to $60.48, with a change of $0.33; Brent crude oil prices changed from $65.99 to $64.92, with a change of $0.52; Dubai crude oil prices changed from $65.24 to $64.86, with a change of - $0.08 [3]. - SC crude oil prices changed from 459.70 to 462.60, with a change of - 0.10; Oman crude oil prices changed from $68.44 to $64.95, with a change of $0.17 [3]. - Japanese naphtha CFR prices changed from $573.13 to an unspecified value, with a change in the differential to Brent of - $1.32; Singapore fuel oil 380 CST changed from a - $0.73 discount to a - $1.8 discount to Brent, with a change of - $0.65 [3]. 3.2 Daily News - On October 29, the US announced a new round of sanctions against Russia, targeting two major oil companies, Lukoil and Rosneft, and their 34 subsidiaries. This is in line with the sanctions previously announced by the UK and the EU [3]. - The US Treasury issued a license for Rosneft's German subsidiaries. Russia's current crude oil exports are in line with the October plan and have not been affected by the new sanctions, but India's HMEL company has suspended further purchases of Russian crude [4]. 3.3 Regional Fundamentals - The comprehensive profit of local refineries decreased, with profits oscillating downward [6]. 3.4 Weekly Viewpoints - Short - term: Indian purchases will continue to support the Dubai market. Oil prices may rebound and have increased volatility risks [6]. - Medium - term: The reduction in Russian oil supply will be affected by multiple factors and will impact the oil price center in Q4 and Q1 of 2026 (a range of $5 - 10). The upside space of oil prices is limited due to OPEC's potential production increase, and the oversupply situation in the fourth quarter continues [6]. 3.5 EIA Data - For the week ending October 24: US crude oil exports increased by 158,000 barrels per day to 4.361 million barrels per day; domestic crude oil production increased by 15,000 barrels to 13.644 million barrels per day; commercial crude oil inventories (excluding strategic reserves) decreased by 6.858 million barrels to 416 million barrels, a decrease of 1.62%; strategic petroleum reserve (SPR) inventories increased by 533,000 barrels to 409.1 million barrels, an increase of 0.13%; commercial crude oil imports (excluding strategic reserves) decreased by 867,000 barrels per day to 5.051 million barrels per day [18]. - The four - week average supply of US crude oil products was 20.753 million barrels per day, a decrease of 0.91% compared to the same period last year [18].

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **global oil market** and its dynamics, particularly focusing on the impact of geopolitical events and economic factors on oil prices and supply chains [1][2][3]. Core Insights and Arguments 1. **Oil Price Fluctuations**: - In October, international oil prices experienced significant volatility, with Brent crude oil dropping to a six-month low of **$61.01** before rebounding. The expected price range for Q4 is between **$60 and $70**, with an average of approximately **$65** [1][10]. 2. **Impact of Sanctions on Russia**: - New sanctions targeting major Russian oil producers, **Rosneft** and **Lukoil**, are expected to reduce Russian oil exports by at least **1 million barrels per day**. These companies account for about **50%** of Russia's oil exports [5][6][8]. - The sanctions will significantly impact global supply chains, particularly affecting imports from Russia to China and India, which are expected to decrease by a combined **1 million barrels per day** [7][8]. 3. **OPEC's Role**: - OPEC has at least **3 million barrels per day** of spare capacity and may consider a slight increase in production by **137,000 barrels per day** in December to stabilize the market. However, a significant increase is not in their interest [1][12][20]. 4. **Global Oil Inventory Levels**: - Global commercial oil inventories are currently low, with U.S. inventories significantly below the five-year average, providing a support level for oil prices. The total inventory, excluding China, is about **1.9 billion barrels**, which is **15 million barrels** lower than the previous year [13][10]. 5. **Seasonal Demand Variations**: - Global energy demand exhibits seasonal fluctuations, with a notable decline expected after the peak demand periods in September and October. This seasonal change is anticipated to lead to a decrease in demand by approximately **500,000 barrels per day** in Q4 [14]. 6. **Macroeconomic Factors**: - Positive macroeconomic signals include a potential easing of U.S.-China tensions, which could stabilize market expectations. The IMF projects a global economic growth rate of **3.0%** for 2025 and **3.1%** for 2026, indicating a stable economic environment for oil markets [15][17]. 7. **Future Oil Price Predictions**: - For 2026, the average price of Brent crude is expected to remain between **$60 and $70**, with a baseline scenario of **$65**. Key factors influencing this include geopolitical events and economic policies [18][22]. 8. **Investment Trends**: - Global upstream oil investment is projected to be around **$600 billion** in 2026, reflecting a **1.5%** year-on-year decline. Major reductions are expected in Europe, Asia-Pacific, and North America, while unconventional resource investments in South America are anticipated to increase [19]. Other Important Insights - **China's Chemical Industry**: The chemical sector in China is expected to hit a low point around **2027-2028**, with gradual recovery thereafter. Ethylene production capacity is projected to increase from **65 million tons** to **90 million tons** by 2030 [28]. - **Shipping Market Changes**: Post-sanction, the global oil shipping market has adapted, with longer shipping routes being utilized and a decrease in compliant vessels, which supports the demand for oil transportation [31]. This summary encapsulates the critical insights and projections regarding the oil market, highlighting the interplay between geopolitical events, economic conditions, and industry dynamics.