Core Viewpoint - The oil market is experiencing a weak trend due to oversupply and seasonal demand decline, leading to a divergence in gasoline and diesel prices and refining profits [1][4][6]. Group 1: International Oil Price Analysis - In December, WTI crude oil average price decreased by 2.71% and Brent by 3.19%, maintaining a weak trend due to oversupply and geopolitical risks [1]. - The outlook for January 2026 suggests further decline in oil prices, driven by a loose fundamental environment and geopolitical factors [1]. Group 2: Domestic Oil Price Transmission - The fluctuation in crude oil prices directly impacts domestic refining sectors, affecting product prices and profit margins [2][4]. - In December, gasoline prices in Shandong experienced a slight increase of 0.34% despite a cumulative drop of 70 CNY/ton, while diesel prices fell by 4.86% with a cumulative drop of 515 CNY/ton [4][6]. Group 3: Gasoline and Diesel Price Trends - Gasoline market prices showed a narrow fluctuation, while diesel prices experienced a downward trend due to seasonal demand decline [4][6]. - The average gasoline crack spread in Shandong rose by 18.82% to 852.69 CNY/ton, while the diesel crack spread fell by 17.95% to 709.74 CNY/ton [4][6]. Group 4: Wholesale and Retail Price Analysis - The average theoretical wholesale-retail price spread for gasoline decreased by 6.8% to 1933.13 CNY/ton, while diesel's increased by 16.91% to 1404.17 CNY/ton [8][10]. - Actual retail price spreads for gasoline and diesel were reported at 1268 CNY/ton and 998.8 CNY/ton respectively, with minor fluctuations in theoretical profits [8][10]. Group 5: Future Outlook - The forecast for January indicates a continuation of the divergence in refining profits and price spreads for gasoline and diesel, with gasoline prices expected to slightly rise and diesel prices to decline [9][11].

Core Viewpoint - Morgan Stanley's research report indicates that CNOOC's A/H shares have underperformed PetroChina's A/H shares by 13% to 22% year-to-date, viewing OPEC's production increase as a signal of demand recovery and healthy global inventory levels rather than internal chaos or price wars [1] Group 1: Company Performance - CNOOC is expected to align its earnings yield with PetroChina, which may help limit its stock price decline despite an anticipated drop in international oil prices to $55 per barrel by the first quarter of next year [1] - The average earnings per share forecast for CNOOC has been raised by approximately 19% for the years 2026 to 2030 [1] Group 2: Target Price and Ratings - CNOOC's H-share target price has been increased from HKD 13.5 to HKD 23, with the rating upgraded from "Underweight" to "Overweight" [1] - CNOOC's A-share has been covered for the first time with an "Overweight" rating and a target price of CNY 30 [1]