Investment Rating - The industry investment rating is "Positive" [1] Core Viewpoints - International oil prices increased due to geopolitical tensions, including Ukraine's attacks on Russian oil facilities and potential restrictions on fuel exports from Russia, alongside a decrease in US crude oil inventories [2][9] - As of September 26, 2025, Brent and WTI crude oil prices were $69.22 and $65.72 per barrel, respectively, reflecting increases of 4.82% and 5.32% from the previous week [2][27] - The report highlights the performance of the oil and petrochemical sector, noting a slight decline of 0.12% in the sector compared to a 1.07% increase in the broader market [10][13] Summary by Sections Oil Price Review - Brent crude futures settled at $69.22 per barrel, up $3.18 (+4.82%) from the previous week, while WTI crude futures rose to $65.72 per barrel, an increase of $3.32 (+5.32%) [2][27] - Russian Urals crude price remained stable at $65.49 per barrel, while Russian ESPO crude increased by $1.67 (+2.65%) to $64.63 per barrel [2][27] Offshore Drilling Services - As of September 22, 2025, the number of global offshore self-elevating drilling platforms was 371, an increase of 1 from the previous week, while floating drilling platforms decreased to 130 [31] US Crude Oil Supply - US crude oil production reached 13.501 million barrels per day, an increase of 19,000 barrels from the previous week [52] - The number of active drilling rigs in the US rose to 424, with an increase of 6 rigs [52] US Crude Oil Demand - US refinery crude processing averaged 16.476 million barrels per day, up by 52,000 barrels from the previous week, with a refinery utilization rate of 93.00%, down 0.3 percentage points [63] US Crude Oil Inventory - Total US crude oil inventory was 821 million barrels, a decrease of 377,000 barrels (-0.05%) from the previous week [72] - Strategic crude oil inventory increased by 230,000 barrels (+0.06%) to 406 million barrels, while commercial crude oil inventory decreased by 607,000 barrels (-0.15%) to 415 million barrels [72] Finished Oil Products - In North America, the average prices for diesel, gasoline, and jet fuel were $98.74 (+0.47), $83.94 (-0.58), and $85.97 (-1.87) per barrel, respectively [91]

Investment Rating - The report maintains a "Positive" investment rating for the oil processing industry [1] Core Insights - International oil prices have risen due to geopolitical tensions, including OPEC+ production adjustments and potential U.S. sanctions on Russia [2][8] - As of September 12, 2025, Brent and WTI oil prices were $66.99 and $62.69 per barrel, respectively, reflecting increases of 2.27% and 1.33% from the previous week [2][29] - The oil and petrochemical sector showed a mixed performance, with the sector down 0.41% while the broader market (CSI 300) rose by 1.38% [9][12] Summary by Sections Oil Price Review - Brent crude futures settled at $66.99 per barrel, up $1.49 (+2.27%) from the previous week, while WTI crude futures rose to $62.69 per barrel, up $0.82 (+1.33%) [2][29] Offshore Drilling Services - As of September 1, 2025, the number of global offshore self-elevating drilling platforms was 372, a decrease of 1 from the previous week [38] U.S. Oil Supply - U.S. crude oil production reached 13.495 million barrels per day, an increase of 72,000 barrels per day from the previous week [57] - The number of active drilling rigs in the U.S. was 416, up by 2 rigs from the previous week [57] U.S. Oil Demand - U.S. refinery crude oil processing averaged 16.818 million barrels per day, down by 51,000 barrels per day from the previous week, with a refinery utilization rate of 94.90%, up 0.6 percentage points [69] U.S. Oil Inventory - Total U.S. crude oil inventories stood at 830 million barrels, an increase of 4.453 million barrels (+0.54%) from the previous week [78] Related Companies - Key companies in the sector include China National Offshore Oil Corporation (CNOOC), China Petroleum & Chemical Corporation (Sinopec), and China National Petroleum Corporation (PetroChina) [2]

Core Viewpoint - The recent escalation of geopolitical tensions in the Middle East has led to a significant increase in international oil prices, reaching their highest levels of the year, driven by concerns over potential disruptions in oil supply and transportation through the Strait of Hormuz [1][3]. Oil Price Movements - As of June 19, Brent crude oil futures rose by 1% to $77.492 per barrel, marking a 20% increase from the year's low [1]. - Domestic crude oil futures in China hit a nearly four-month high, with the main contract closing at 570.9 yuan per barrel, a daily increase of 4.73% and a 28.38% rise for June [1]. Geopolitical Impact - Analysts suggest that the ongoing conflict may lead to a short-term decline in Iranian oil supply and potential disruptions in the Strait of Hormuz, coinciding with the upcoming peak oil consumption season in the Northern Hemisphere [3]. - Concerns over the safety of oil transportation have intensified, with fears that further escalation could impact oil and gas infrastructure in Iran [4][5]. Market Volatility - The Chicago Board Options Exchange (CBOE) Oil ETF Volatility Index (OVX) surged by 26% to 71.56, the highest level in nearly three years, indicating heightened market expectations for oil price volatility [4]. - The shipping costs for supertankers have dramatically increased, with daily rental rates for Very Large Crude Carriers (VLCCs) rising from $19,998 to $47,609, a 138% increase within a week [6]. Supply Tightening - The risk of oil supply disruptions is expected to increase, with the potential for accelerated inventory depletion and higher oil prices if the situation escalates [7]. - Recent data from the U.S. Energy Information Administration (EIA) indicated a significant drop in U.S. crude oil inventories, decreasing by 11.473 million barrels to 421 million barrels, the largest decline in a year [7]. Future Outlook - Short-term oil price movements may continue to rise due to lower-than-expected actual production increases from OPEC+ and the onset of the travel season in Europe and the U.S., compounded by escalating geopolitical tensions [8]. - Historical trends suggest that geopolitical factors may have a transient impact on oil prices, with long-term price movements being more influenced by economic outlook and supply-demand dynamics [8].