Report Industry Investment Rating No relevant information provided. Core Viewpoints of the Report - The report maintains the view that oil prices will decline throughout the year. It is expected that the supply - demand balance in the oil market will gradually break by the end of the year, and Brent crude oil prices are likely to challenge the $60/barrel mark again. The expected price range for the second half of the year is $57 - 86/barrel, with an average of $67/barrel. In the fourth quarter, supply is increasing while demand is seasonally decreasing, making oil prices prone to decline. The reference price range for Brent crude is $59 - 74/barrel, with an average of $64/barrel [1][2]. Summary by Directory 1. 2025 Fourth - Quarter Outlook - The report maintains previous views that oil prices will decline throughout the year. Non - OPEC+ supply will significantly increase in the second half of the year, and seasonal peak consumption will end in the third quarter, leading to a break in the oil market balance. Considering additional negative factors, the oil market remains difficult. The expected price range for the second half of the year is $57 - 86/barrel, with an average of $67/barrel. In the fourth quarter, supply increases while demand seasonally decreases, and the reference price range for Brent crude is $59 - 74/barrel, with an average of $64/barrel [1][2]. 2. Third - Quarter Market Review - In the third quarter, the trading center of oil prices gradually declined. The increase in early July was driven by strong demand, and subsequent increases were mostly due to geopolitical situations. Declines were driven by the disappearance of supply - risk - driven increases, high tariffs, poor non - farm employment reports, and OPEC+'s decision to gradually exit production - cut agreements. Excluding short - term disturbances, oil prices showed weakness after August, which was due to the market's consensus on supply surplus. The height of price rebounds also showed a decreasing trend [5]. 3. Crude Oil Balance Sheet (1) Supply Surplus Remains the Consensus - IEA and EIA have continuously raised supply expectations for three consecutive months, with non - OPEC+ supply growth far exceeding global demand growth. OPEC maintains an optimistic demand forecast and implies that OPEC+ needs to increase production to balance supply and demand. Overall, IEA and EIA expect future supply to far exceed demand and inventory to increase significantly, while OPEC is endorsing potential future production increases [7][8]. (2) The Balance Sheet Shows a Gradual Increase in Supply - Demand Surplus - According to the EIA balance sheet, supply exceeds demand in all quarters of this year and next year. After the summer peak consumption season, the supply - surplus pattern will expand. The surplus in the third and fourth quarters of this year and the first quarter of next year will exceed 2 million barrels per day, and the situation will improve in the second quarter of 2026 [10]. (3) The Narrative of Large - Scale Supply is Further Strengthened - IEA and EIA have continuously raised supply growth expectations. Compared with three months ago, their global supply growth expectations have increased by 900,000 and 790,000 barrels per day respectively. IEA attributes all the 900,000 - barrel - per - day increase to OPEC+, while EIA attributes most of the supply increase to non - OPEC+. OPEC has raised its 2026 Call On OPEC+ forecast to justify future production increases [14][15]. 4. Macroeconomics and Its Marginal Changes (1) The Essence of the Fed's Shift to Rate Cuts is the Increasing Risk in the Employment Market - The Fed has been hesitant about rate cuts this year due to signs of stagflation in the US economy. Traditional monetary policies are ineffective in stagflation. Currently, US core inflation is stubborn, and employment indicators have been disappointing for two consecutive months, indicating increasing employment market risks. The Fed's shift to preventive rate cuts is to prioritize economic stability [16][17]. (2) The Contradictory September Fed Meeting - The Fed cut rates by 25BP to 4% - 4.25% in September, in line with market expectations. The September dot - plot shows a significant downward shift, indicating that doves are gaining the upper hand. The median and average both decreased by 25BP. The meeting content is contradictory, with the policy statement highlighting employment risks while the economic forecast shows a decline in the unemployment rate. The report predicts that the Fed will cut rates twice in the second half of the year [20][21][22]. 5. Microeconomics and Its Marginal Changes (1) The Month - Spread Indicates a Weakening of Supply - Demand Fundamentals - The month - spread reflecting immediate supply - demand relations has weakened since August but rebounded slightly due to geopolitical situations. Global supply increases and seasonal demand decline will continue to pressure the oil market. The month - spread in the Middle East is relatively strong, supported by China's strategic oil reserves. China's implied inventory increase from March to August this year reached a monthly average of 1.33 million barrels per day, the highest since 2020 [24]. (2) Crack Spreads Still Provide Support - Crack spreads remain supported, mainly due to diesel. OPEC+'s production cuts since 2022 have reduced the supply of intermediate components, and sanctions on Russia have further decreased the supply of middle - distillates. Diesel crack spreads are the main support for the market, and the performance of US distillate oil consumption is a key signal [29][31]. (3) Production Will Continue to Rise in the Fourth Quarter - OPEC+ will gradually exit a 1.65 - million - barrel - per - day production - cut agreement in October and increased production by 137,000 barrels per day in that month. Except for Kazakhstan, other OPEC+ countries have closely followed their production targets. If calculated according to the IEA's report, OPEC+'s production - increase capacity will far exceed market expectations. Non - OPEC+ production is also increasing, with countries like Canada, Brazil, and others contributing to the growth. The current oil supply pattern fits the narrative of large - scale supply, and $55 - 60/barrel is considered a balance point for various stakeholders [33][39][40]. (4) Demand Gradually Moves Out of the Peak Season - Although crack spreads are temporarily strong, seasonal demand decline exists. After the peak travel season and summer power - generation demand in the Northern Hemisphere end, refinery maintenance will increase, and demand will decline. The fourth - quarter demand boost will be limited, and the market will focus on the weak demand in the first quarter [41][42]. (5) Pay Attention to Geopolitical and Sanction Disturbances - Geopolitical and sanction factors are the only things that can change the current large - scale supply situation. Russia will partially restrict diesel exports and extend the gasoline export ban due to attacks on its refineries. EU and US sanctions on Russia have had limited long - term impacts on oil supply [43].

1. Report Industry Investment Rating - No relevant content provided 2. Core Viewpoints of the Report - Crude oil remains under the pressure of the large - supply narrative in the medium to long term. As supply continues to increase and autumn maintenance deepens, the supply - demand imbalance will become more significant, and oil prices will be pressured accordingly. Short - term interference factors mainly include Middle East geopolitical situations and potential sanctions against Russia. Next week, the Fed meeting needs attention [8][9]. 3. Summary by Directory 3.1 Weekly Views - Last week's monthly report view: Crude oil is under long - term supply pressure. If OPEC+ continues to increase production at the Sunday meeting, combined with seasonal weakness in demand and US autumn maintenance, the supply - demand imbalance will be more obvious, and oil prices will be pressured. Short - term interference factors include OPEC+ meeting results, Russia - Ukraine peace talks progress, sanctions, and the Fed's September meeting decision. - This week's price trend: Oil prices first rose and then fell. The rise was due to OPEC+'s less - than - expected production increase, Middle East geopolitics, and potential sanctions against Russia. However, oil prices turned down after institutional monthly reports maintained the large - supply narrative. - Fundamentals: Supply - demand is continuously loose, terminal demand is okay, and the US is about to enter the autumn maintenance period (2.1 - 2.4). - Institutional monthly reports: IEA and EIA continue the large - supply narrative and predict a significant increase in inventory (2.5 - 2.8). - OPEC+: Still committed to competing for market share (2.9 - 2.12). - Fed's September meeting: The market has fully priced in a 25BP interest rate cut, but the focus is on the dot plot and economic forecasts (2.13) [9]. 3.2 Weekly Highlights - **2.1 Global near - month spreads oscillated weakly**: Global main market Brent and WTI near - month spreads continued to decline, indicating a further slowdown in spot supply - demand, which is a relatively negative signal [11][13]. - **2.2 Crack spreads still have support**: Global spot prices generally still have support. US spot crack spreads oscillated, while those in Northwest Europe and Singapore increased slightly. Combining with 2.1, although terminal demand is okay, leading to stable or rebounding crack spreads in some regions, the supply increase is greater, causing the near - end spreads to weaken [14][15][16]. - **2.3 Fundamental quantitative indicators (beta version)**: The current comprehensive fundamental indicator of crude oil is negative, triggered from the close on 9/10 and lasting for 2 days. The forward - looking fundamental indicator is neutral, with the last signal being negative from 7/31 to 8/1 [19]. - **2.4 US inventory and demand situation**: As of September 5, the US refinery utilization rate increased by 0.6% month - on - month to 94.9%, indicating that traditional autumn maintenance has not fully started. All major crude oil product inventories increased this week, with gasoline inventory unexpectedly rising and distillate inventory rising far beyond expectations, driving a significant increase in the total inventory of the crude oil chain. Gasoline implied demand dropped to 850.8 million barrels per day, far lower than the previous level of around 9 million barrels per day. Distillate inventory increase is against the seasonal trend, which will suppress future refinery utilization rates and corresponding refining demand [21]. - **2.5 Main energy institutions' September report views summary**: IEA, OPEC, and EIA have different forecasts for demand and supply growth rates. IEA and EIA have continuously raised supply forecasts, and EIA predicts a significant decline in Brent crude oil prices in the next few months due to supply increases [22]. - **2.8 EIA monthly report balance sheet changes**: EIA comprehensively raised the supply and demand forecasts for the second half of this year and all quarters of next year, with a larger increase in the supply side, making the balance sheet looser month by month. The core driving logic is supply increase, and demand increase is a passive result of falling oil prices [30]. - **2.10 OPEC+ announced a 137,000 - barrel - per - day production increase in October**: In the September 7 meeting, OPEC+ announced a gradual withdrawal from the 1.65 - million - barrel - per - day production cut agreement starting in October and a 137,000 - barrel - per - day production increase in that month. Except for Kazakhstan's continuous over - production, other countries have well - implemented the plan [36]. - **2.13 Attention to the Fed's September interest - rate meeting**: US employment data is weak, and inflation data is stubborn. The market has fully priced in a 25BP interest rate cut in September. The Fed is likely to cut interest rates by 25BP in September, but the subsequent rate - cut path depends on economic data and Fed independence. The number of preventive interest - rate cuts is determined by the employment market and overall economic performance, which is generally negative for crude oil, except when core inflation significantly declines [42]. - **2.14 North American hurricane forecast**: According to NOAA's forecast, this year's hurricane activity has a 60% chance of exceeding the normal level but is relatively calm compared to last year. Currently, there are no hurricanes in the Gulf of Mexico, and no potential cyclones are expected to form in the key Gulf of Mexico area in the next 7 days [44]. 3.3 Price, Spreads, and Crack Spreads - **3.1 Crude oil futures and spot trends**: Presented the trends of Brent, WTI, Oman, and SC crude oil futures and spot prices [47]. - **3.3 WTI crude oil position report**: Showed the net long positions of WTI futures and options and related position - price relationships [52]. - **3.4 Crude oil futures structure**: Displayed the futures price structures of WTI, Brent, Oman, and SC [55]. - **3.5 Crude oil spreads**: Presented the spreads of WTI, Brent, Oman, and SC (M1 - M2, M1 - M3, etc.) [58]. - **3.6 Cross - market futures spreads**: Showed cross - market futures spreads such as Brent - WTI, Brent - Oman, etc. [60]. - **3.7 Cross - market spot spreads**: Presented cross - market spot spreads like Brent - WTI, Brent - Dubai, etc. [63]. - **3.8 American spot spreads**: Displayed American spot spreads such as Midland - Cushing, LLS - MARS, etc. [66]. - **3.9 Asian spot spreads**: Presented Asian spot spreads such as Tapis - Dubai, Tapis - Minas [69]. - **3.10 Saudi OSP**: Saudi Arabia announced a reduction in the October crude oil premium for all regions, with a reduction range of 0.6 - 1.0 US dollars per barrel, exceeding market expectations [39][70]. - **3.14 Refined product spot prices**: Showed the spot prices of refined products in the US Gulf, New York Harbor, Northwest Europe, and Singapore [80]. - **3.15 Refined product spot crack spreads**: Presented the spot crack spreads of refined products in the US Gulf, New York Harbor, Northwest Europe, and Singapore [83]. 3.4 Supply - Demand Inventory Balance Sheet - **4.1 Global crude oil total supply**: Presented the supply trends of global, non - OPEC+, OPEC, and OPEC+ crude oil [96]. - **4.2 Non - OPEC crude oil total supply**: Showed the supply trends of non - OPEC countries such as the US, the former Soviet Union region, China, and Brazil [99]. - **4.3 OPEC crude oil total supply**: Displayed OPEC's crude oil production, capacity, and remaining capacity trends [102]. - **4.4 OPEC crude oil supply - major countries**: Showed the crude oil supply trends of major OPEC countries such as Saudi Arabia, Iraq, the UAE, and Kuwait [105]. - **4.5 OPEC crude oil supply - exempt countries**: Presented the crude oil supply trends of OPEC exempt countries such as Iran, Libya, and Venezuela [108]. - **4.6 Global rig count**: Showed the rig counts of the US, Canada, and the global total [111]. - **4.7 US crude oil rigs**: Displayed the US rig count, uncompleted well number, single - well new production, and oil - gas total production [113]. - **4.9 FCC unit outages**: Presented the FCC unit outage volumes globally, in the US, Northwest Europe, and Asia [118]. - **4.11 OECD crude oil total demand**: Showed the demand trends of OECD countries such as the US, Canada, Europe, and Japan [122]. - **4.12 Non - OECD crude oil total demand**: Presented the demand trends of non - OECD countries such as China, Russia, India, and Brazil [125]. - **4.13 Crude oil total inventory**: Showed the inventory trends of the US, OECD, and global total inventory and consumption [128]. - **4.17 EIA balance sheet**: Presented the EIA's supply, consumption, balance, and balance change data from 2025Q3 to 2026Q4 [148]. - **4.19 Singapore refined product inventory**: Showed the inventory trends of light distillates, middle distillates, residue, and total refined products in Singapore [142].