1. Investment Rating The provided content does not mention the industry investment rating. 2. Core Viewpoints - Low - sulfur fuel oil: Supply is affected by refinery device changes. The supply incremental is less than expected due to the delay and shortening of the Dangote refinery's gasoline device maintenance plan. The Al - Zour refinery's device delay provides support. The supply gap disturbance from South Sudan has subsided. Demand for winter power generation lacks a driver, and attention should be paid to winter temperatures and natural gas conditions in Europe and East Asia [4]. - High - sulfur fuel oil: The spot window transaction price continues to decline, and the spot premium remains at a low level. It is expected to maintain a stable and weak trend in the fourth quarter. Russian exports are slightly affected by attacks, and Mexican exports have increased recently. The feed demand for fuel oil is expected to weaken due to the upcoming issuance of new crude oil quotas [4]. 3. Summary by Directory 3.1 Comprehensive Analysis and Trading Strategies 3.1.1 Comprehensive Analysis - Low - sulfur: Monitor the impact of refinery device changes on supply. The winter power - generation demand has no driver yet, and focus on winter temperatures and natural gas in Europe and East Asia. The supply reduction in the Pan - Singapore region is less than expected [4]. - High - sulfur: The spot price is weak, and the fourth - quarter outlook is stable and bearish. Russian exports are slightly affected, and Mexican exports are rising. The feed demand for fuel oil is expected to decline [4]. 3.1.2 Strategies - Unilateral: Weak and volatile, not advisable to buy at low levels [5]. - Arbitrage: High - sulfur cracking fluctuates at a low level, and low - sulfur cracking is neutral [5]. - Options: Hold a wait - and - see attitude [5]. 3.2 Core Logic Analysis 3.2.1 High - Sulfur Fuel Oil Supply - Russia: Energy facilities have recovered, and the overall refining capacity has increased. November exports increased by 17% month - on - month, and December exports are expected to rise [8][9]. - Mexico: Pemex's processing volume increased in October, and November exports were stable. High - sulfur supply is expected to decline marginally in the future [15]. - Middle East: Iraq plans to supply over 6 million tons of high - sulfur fuel oil in 2026. November exports decreased slightly from the October high. Sanctions on Iran continue [17]. 3.2.2 High - Sulfur Fuel Oil Demand - Feed demand: New crude oil quotas are expected to be issued in November 2026, with a significant increase compared to the end of last year. Feed demand for fuel oil is expected to weaken [4]. - Marine fuel demand: Supported by the stable growth of the number of desulfurization tower ships [26]. 3.2.3 Low - Sulfur Fuel Oil Supply - Pan - Singapore region: The expected excess supply is gradually decreasing as RFCC device operations increase [29]. - Nigeria: Supply is affected by the frequent changes in the Dangote refinery's maintenance time [32]. - Middle East: Device return times are all delayed, and the supply gap persists in the short term [35]. - Sudan: Energy facilities were attacked, and oil supply has recovered. Low - sulfur crude oil has been redirected to the Pan - Singapore region [38]. 3.2.4 Low - Sulfur Fuel Oil Demand - There is no specific driver. Marine fuel demand is stable, and power - generation is less economical than natural gas [40]. 3.2.5 China's Low - Sulfur Market - The export quota for bonded low - sulfur fuel oil in the fourth quarter is tight. The production in October increased, with different trends among different refineries [45]. 3.3 Weekly Data Tracking - Fuel oil spot: The document provides price trends of Brent, HSFO380, LSFO, and their spreads with other products [49][50][53]. - High - sulfur fuel oil spreads: Include cross - region and cross - period spreads [56]. - Low - sulfur fuel oil spreads: Include cross - region and cross - variety spreads [63]. - Natural gas - fuel oil ratio: Provides equivalent - calorific - value price data and changes [66]. - Cross - region freight: Shows freight trends between different regions [69]. - Singapore bunkering spreads: Presents spreads of HSFO and LSFO in Singapore [72]. - Fuel oil inventory: Covers inventory structures in Singapore, ARA, Fujairah, Japan, and the US [75]. - Northwest Europe inventory: Includes gasoline, diesel, and refined - oil inventories in ARA [82]. - US Gulf inventory: Covers gasoline, diesel, crude - oil, and Cushing crude - oil inventories in the US [85].

Report Industry Investment Ratings - Crude Oil: ★★★ (more distinct long trend with relatively appropriate investment opportunities currently) [2] - Fuel Oil: ★★★ (more distinct long trend with relatively appropriate investment opportunities currently) [2] - Low - Sulfur Fuel Oil: ★★★ (more distinct long trend with relatively appropriate investment opportunities currently) [2] - Asphalt: ★★★ (more distinct long trend with relatively appropriate investment opportunities currently) [2] Core Viewpoints - The oil price has a downward pressure on the central price due to the expanding supply - demand surplus in the fundamentals, despite a short - term rebound from geopolitical factors [3] - The core driver of the fuel oil market lies in the supply side, with different influencing factors for high - sulfur and low - sulfur fuel oils, and the supply - demand structure needs further attention [4] - The domestic asphalt market shows a regional differentiation in prices, with weak demand and slow inventory reduction, expected to continue the weak trend [5] Summary by Related Catalogs Crude Oil - API data shows an increase in refined oil and crude oil inventories in the US [3] - The SPM - 3 of the Caspian Pipeline Consortium in Russia, under maintenance since mid - November, is expected to resume operation within the next seven days, faster than the original plan [3] - After the rebound pricing due to geopolitical tensions, there is a sign of giving back some geopolitical premiums, and the expanding supply - demand surplus determines the downward pressure on the oil price center [3] Fuel Oil & Low - Sulfur Fuel Oil High - Sulfur Fuel Oil - The short - term support comes from the decline in Middle East shipments and ongoing geopolitical conflicts, and previous coking profits and quota shortages boosted its feedstock demand [4] - The early issuance of domestic crude oil quotas may divert this demand [4] - Although the Russia - Ukraine negotiations send positive signals, the risk premium will not completely disappear before clear implementation, and sanctions will continue to affect the shipment of high - sulfur resources [4] - In the medium term, logistics difficulties have led to floating storage inventory accumulation, and the loose pattern remains unchanged [4] Low - Sulfur Fuel Oil - Supply fluctuations mainly come from unplanned overseas refinery maintenance [4] - The return of the Bintulu refinery and the postponed restart of the Azur refinery have slightly relieved short - term supply pressure, but weakening refined oil cracking continues to put pressure on it [4] - Attention should be paid to the production increase pressure from continuous overseas refinery restarts and whether the year - end shipping peak season and winter power generation demand can improve the supply - demand structure [4] Asphalt - The spot price of the domestic asphalt market shows a regional differentiation trend [5] - Demand in the Northeast and North China regions is gradually stagnant, with traders mainly stocking up in warehouses; the South China market has weak trading sentiment due to a low contract price from a Hainan refinery, and prices are weakly stable [5] - The weekly shipment volume has remained below 400,000 tons since the middle of the month, at a near - four - year low [5] - Social inventory has decreased slightly month - on - month, and the year - on - year increase has gradually expanded after a turning point from a decrease to an increase in late October; refinery inventory has increased slightly month - on - month, and the de - stocking rhythm of overall commercial inventory has significantly slowed down [5] - The BU is expected to continue the weak trend [5]

Report Summary 1. Report Industry Investment Rating No investment rating information is provided in the report. 2. Core View of the Report The current peak season for asphalt has not shown better - than - expected performance. Short - term external disturbances have increased. It is recommended to wait and see in the short term or look for pressure levels after the price rises to arrange short positions. The supply of asphalt remains stable, the demand is weak due to weather and other factors, the cost of crude oil is expected to decline, and the South China region is still the price depression [3]. 3. Summary by Relevant Catalogs 3.1 Price and Volatility - The predicted monthly price range of the asphalt main contract is 3000 - 3450, the current 20 - day rolling volatility is 14.25%, and the historical percentile of the current volatility in the past 3 years is 15.91% [2]. 3.2 Risk Management Strategy - **Inventory Management**: For enterprises with high finished - product inventory, to prevent inventory losses, they can short - sell asphalt futures (bu2512) with a hedging ratio of 25% at an entry range of 3650 - 3750. They can also sell call options (bu2512C3500) with a ratio of 20% at an entry range of 30 - 40 to reduce capital costs [2]. - **Procurement Management**: For enterprises with low regular inventory, to prevent rising procurement costs, they can buy asphalt futures (bu2512) with a hedging ratio of 50% at an entry range of 3300 - 3400. They can also sell put options (bu2512C3500) with a ratio of 20% at an entry range of 25 - 35 to collect premiums and reduce procurement costs [2]. 3.3 Core Contradiction - The news of a possible US military strike on Venezuela has led to a rise in crude oil and asphalt prices. Since Venezuelan crude oil accounts for over 20% of China's asphalt refinery feedstock, the market is worried about raw material supply disruptions. However, the accuracy of the news needs to be verified by tracking Venezuelan crude oil shipments and China's imports [3]. - The refinery's production is stable, and the overall asphalt supply has little change. The demand is weak after the National Day holiday, mainly consuming social inventory. The inventory structure has improved, with stable and low - pressure factory inventories and a declining social inventory. The problem of raw material shortage has not been fundamentally resolved, so the asphalt cracking spread remains high. The cost of crude oil is expected to decline as OPEC continues to increase production. The price of crude oil has dropped rapidly due to the escalation of Sino - US tariffs. The South China region remains the price depression due to crude oil quotas and consumption tax restrictions [3]. 3.4利多解读 - The pressure on asphalt factory inventories is low, providing a basis for manufacturers to support prices [6]. - In Shandong, Shengxing has resumed asphalt production, while Qicheng and Fengli have switched to producing residual oil. In the East China region, some major refineries have reduced production [6]. - There is an atmosphere of anti - cut - throat competition, and the Ministry of Industry and Information Technology has issued a document to resist disorderly price wars [6]. - There is a possibility of an escalation of the conflict between the US and Venezuela [6]. 3.5利空解读 - The escalation of US tariffs on China has weakened the overall sentiment in the risk market [7]. - The recent increase in the arrival of Venezuelan crude oil and the continued production increase by OPEC+ in November are negative factors for asphalt prices [12]. 3.6 Price and Basis Data - **Spot Price**: On October 22, 2025, the spot prices in Shandong, the Yangtze River Delta, North China, and South China were 3330 yuan/ton, 3470 yuan/ton, 3330 yuan/ton, and 3400 yuan/ton respectively. Compared with the previous day, the prices in Shandong and North China decreased by 10 yuan/ton, while those in the Yangtze River Delta and South China remained unchanged [7]. - **Basis**: The basis of Shandong, the Yangtze River Delta, North China, and South China for the 12 - contract decreased by 56 yuan/ton, 46 yuan/ton, 56 yuan/ton, and 46 yuan/ton respectively compared with the previous day [7]. - **Cracking Spread**: The cracking spread of Shandong spot to Brent decreased by 1.7329 yuan/barrel compared with the previous day, while the cracking spread of the futures main contract to Brent increased by 15.9425 yuan/barrel [7].

Report Industry Investment Ratings - Crude oil: ★☆★ [1] - Fuel oil: ★☆★ [1] - Low-sulfur fuel oil: ★☆☆ [1] - Asphalt: ★☆☆ [1] - Liquefied petroleum gas: ★☆☆ [1] Core Views - The international oil price continued to rise overnight and weakened after the opening today. The SC08 contract rose 1.36% intraday. The geopolitical concerns have eased slightly, but the supply risks related to Iran's energy infrastructure and the passage of the Strait of Hormuz still exist. Crude oil is still judged to be oscillating strongly, and investors can continue to hold low-cost call options. The spread between SC and Brent is expected to rise [2]. - The fuel oil futures followed the crude oil to rise and then fall. The Israel-Iran conflict has boosted the geopolitical premium of high-sulfur fuel oil. The demand for high-sulfur fuel oil is weak, and the FU cracking is weak. The supply of low-sulfur fuel oil is still abundant, and the LU cracking continues to decline [3]. - Asphalt followed the oil price to rise and then fall. The increase in asphalt production is expected to be limited. The terminal demand is expected to increase, and the inventory data continues to decline. However, the BU cracking is under pressure before the upward risk of oil price caused by geopolitical risks is lifted [4]. - The geopolitical conflict in the Middle East is still fermenting, and the international market is running strongly. The domestic chemical demand has rebounded, but the profit margin is under pressure. If the geopolitical risks are relieved, the supply pressure will bring a strong downward drive. The fundamentals still have certain loose pressure, and the disk is oscillating strongly [5]. Summaries by Related Catalogs Crude Oil - The international oil price continued to rise overnight and weakened after the opening today, with the SC08 contract rising 1.36% intraday [2]. - Trump postponed the decision on whether to attack Iran for two weeks, and the geopolitical concerns have eased slightly [2]. - The supply risks related to Iran's energy infrastructure and the passage of the Strait of Hormuz still exist before the return to the negotiation table [2]. - Crude oil is still judged to be oscillating strongly, and investors can continue to hold low-cost call options [2]. - The spread between SC and Brent is expected to rise due to the direct impact of geopolitical risks on the supply of medium-sulfur crude oil and the support of tanker freight rates [2]. Fuel Oil & Low-sulfur Fuel Oil - The fuel oil futures followed the crude oil to rise and then fall [3]. - The Israel-Iran conflict has boosted the geopolitical premium of high-sulfur fuel oil, and the high-sulfur fuel oil has been supported since the conflict broke out [3]. - The demand for high-sulfur fuel oil in ship bunkering and deep processing is low, and the demand boost from summer power generation in the Middle East and North Africa is greatly reduced due to the high cracking valuation [3]. - The FU cracking is weak under the strong crude oil, and the supply of low-sulfur fuel oil is still abundant, while the demand for low-sulfur marine fuel is insufficient, and the LU cracking continues to decline [3]. Asphalt - Asphalt followed the oil price to rise and then fall [4]. - The increase in asphalt production is expected to be limited due to the consumption of crude oil quotas and the planned increase in the operation of deep processing equipment by major refineries after the maintenance peak [4]. - The shipment volume of 54 sample refineries has continued to increase month-on-month, and the cumulative year-on-year increase has turned positive. The sales volume of road rollers has increased significantly year-on-year from January to April, indicating that the terminal demand is expected to increase [4]. - As of June 19, the weekly inventory data of refineries and society has continued to decline. However, the BU cracking is under pressure before the upward risk of oil price caused by geopolitical risks is lifted [4]. Liquefied Petroleum Gas - The geopolitical conflict in the Middle East is still fermenting, and the international market is running strongly [5]. - The domestic chemical demand has rebounded, but the profit margin is under pressure due to the increase in import costs [5]. - The arrival volume in the middle of the month and the release of refinery gas have both increased. If the geopolitical risks are relieved, the supply pressure will bring a strong downward drive [5]. - The fundamentals still have certain loose pressure, and the disk is oscillating strongly under the support of strong crude oil and political risks [5].