Core Viewpoint - East Asian refineries are expected to continue increasing purchases of US light low-sulfur crude oil by 2026 to diversify supply channels, mitigate geopolitical risks, and enhance refining profits while maintaining diplomatic relations with the US [1][2]. Group 1: Market Trends - East Asian refineries, particularly in South Korea, Japan, and Thailand, are shifting from high-sulfur crude oil to US light low-sulfur crude oil to improve energy supply security and stabilize supply chains [1][2]. - Japan's crude oil imports from the US surged to 106,300 barrels per day in October 2025, a more than 26-fold increase from 4,029 barrels year-on-year, and nearly tripled from 36,200 barrels in September 2025 [1]. Group 2: Economic Factors - The narrowing price differential between Brent and Dubai crude oil futures has made US West Texas Intermediate crude more economically attractive compared to mainstream heavy sour crude, leading to a shift in refining profit margins [2][3]. - South Korea is projected to remain the largest buyer of US crude oil in Asia, with an expected annual purchase of 136 million barrels in 2025 [2]. Group 3: Strategic Partnerships - Thailand has committed to increasing US crude oil purchases as part of a bilateral trade agreement framework announced on October 26, 2025, aimed at deepening cooperation with the US [4]. - South Korea signed a $100 billion energy procurement agreement with the US, which is a key component of a broader trade agreement to reduce mutual tariffs from 25% to 15% [4]. - Japan and the US signed a comprehensive trade and investment agreement on October 28, 2025, which includes Japan's commitment to invest $550 billion in US energy infrastructure and related sectors [4].

Report Industry Investment Rating - Not provided in the document Core Viewpoints - The domestic refined oil market is expected to continue its weak pattern next week, with both gasoline and diesel showing a supply - demand imbalance, and gasoline being relatively better due to stocking expectations [7] Summary by Directory Comprehensive Analysis Market Overview - Supply: The national refinery operating rate increased by 0.4 percentage points to 70.6% this week. The operating rate of major refineries increased, while that of Shandong local refineries decreased slightly. Major refineries increased gasoline production, with gasoline output rising and diesel output falling slightly. Local refinery output of both gasoline and diesel decreased, and the diesel - gasoline ratio rose to 1.49 [6][37][46] - Demand: The weekly average sales - to - production ratio of Shandong refineries for both gasoline and diesel declined, with gasoline at 97% and diesel at 95% [6] - Inventory: Commercial inventories of both gasoline and diesel increased. Gasoline inventory was 1095 tons, up 22 tons (+2.1%), and diesel inventory was 1254 tons, up 13 tons (+1.1%). Local refinery inventories increased, while social inventories decreased [6][77] Market Outlook - Supply: The operating rate of major refineries is expected to increase, while that of local refineries and their output are expected to continue to decline, but the decline will narrow. Overall domestic output is expected to decrease [7] - Demand: Demand will remain weak. Gasoline terminal demand will not improve, and diesel demand will continue to decline [7] - Inventory: Shandong independent refinery gasoline inventory will face upward pressure, and diesel inventory is also expected to increase [7] Core Logic Analysis and Data Tracking Price - Gasoline and diesel market prices have declined. For example, the gasoline market price on January 8, 2026, was 7253 yuan/ton, down 72 yuan/week and 1159 yuan/year. The diesel market price was 5992 yuan/ton, down 184 yuan/week and 1004 yuan/year [13] Profit - Major refinery refining profit was 677.46 yuan/ton, up 1.85% week - on - week. The weekly average profit of Shandong independent refineries processing imported crude oil was 368.79 yuan/ton, up 0.13% week - on - week and 71.18% year - on - year [19] Supply - Operating Rate: The national refinery operating rate increased to 70.6%. Major refinery operating rates increased, while independent and Shandong local refinery operating rates decreased [36][37] - Maintenance Plan: As of January 9, 2026, the total maintenance capacity was 57 million tons/year, and Shenchi Chemical started full - plant maintenance [42] - Output: Major refineries increased gasoline production, while local refineries' output of both gasoline and diesel decreased. The diesel - gasoline ratio increased [44][46] Sales - The weekly average sales - to - production ratio of Shandong refineries for both gasoline and diesel declined. The market sentiment was negative, and the increase in sales - to - production ratio was limited [50][54] Demand - Gasoline: The consumption index is mainly used for reference. The demand is affected by factors such as urban congestion index, flight schedules, and service industry PMI [59][60] - Diesel: The demand is related to manufacturing PMI, cement and asphalt shipments, steel consumption, and express delivery volume [70][71] Inventory - Commercial inventories of gasoline and diesel increased. Local refinery inventories increased, and social inventories decreased. Next week, Shandong independent refinery gasoline and diesel inventories are expected to increase [73][77]

1. Report Industry Investment Rating - No relevant content provided 2. Core Viewpoints of the Report - This week, the national refinery operating rate increased slightly, with the main refineries' operating rate rising and the independent refineries' operating rate falling. Gasoline production decreased, while diesel production showed a mixed trend. The diesel - to - gasoline ratio increased. Market sentiment was cautious, with low purchasing enthusiasm for gasoline and improved sales of diesel due to low - price support. Both gasoline and diesel commercial inventories increased. Next week, overall production is expected to decline slightly, demand will be weak, and there will be a supply - demand imbalance, with possible price differentiation and increased inventory pressure [6][7]. 3. Summary by Directory 3.1 Comprehensive Analysis 3.1.1 Market Overview - Supply: The national refinery operating rate was 70.8% this week, up 0.2% from the previous week. Main refineries' operating rate increased slightly as Guangzhou Petrochemical's atmospheric and vacuum distillation unit resumed operation after maintenance. Independent refineries' operating rate decreased slightly due to the new coking unit maintenance at Jiangsu Xinhai Petrochemical. Gasoline production from both main and independent refineries decreased, while diesel production from main refineries increased and that from independent refineries decreased. The diesel - to - gasoline ratio rose by 0.02 to 1.48 [6]. - Demand: Market sentiment was cautious. The purchasing enthusiasm of downstream gasoline vehicle orders was low, while diesel orders from ships and vehicles increased due to low - price support, and the sales - to - production ratio increased. Neither gasoline nor diesel achieved a sales - production balance [6]. - Inventory: Commercial inventories of both gasoline and diesel increased. Gasoline inventory was 10.74 million tons, up 280,000 tons (+2.7%) from the previous week; diesel inventory was 12.39 million tons, up 250,000 tons (+1.8%). Independent refinery inventories increased due to high - level operation after the issuance of crude oil quotas and low market purchasing enthusiasm. Social gasoline inventory increased as some resources were stored, while diesel inventory decreased as some areas still faced a shortage of main refinery resources [6]. 3.1.2 Future Outlook - Supply: Next week, the operating rate of main refineries is expected to remain stable, while independent refineries may reduce their load slightly due to increased sales pressure. Overall, gasoline and diesel production is expected to decline slightly [7]. - Demand: Demand will be weak. The inventory - building sentiment in the gasoline market will cool down, but prices will be relatively stable due to cost support. Diesel demand will continue to weaken due to the significant cooling and snowfall in the north, and the market's bearish expectation will increase. Price promotions will have limited impact on sales [7]. - Inventory: Shandong independent refineries' gasoline inventory may increase slightly as some ship orders are concentrated for delivery, but terminal vehicle orders are weak. Diesel inventory pressure will increase as production is expected to increase while demand decreases seasonally [7]. 3.2 Core Logic Analysis and Data Tracking 3.2.1 Price - Gasoline market price: On December 11, 2025, the national average gasoline price was 7,381 yuan/ton, down 1 yuan from the previous day, up 39 yuan from the previous week, up 39 yuan from the previous month, and down 631 yuan from the previous year. Prices in different regions showed different trends [14]. - Diesel market price: On December 11, 2025, the national average diesel price was 6,416 yuan/ton, down 3 yuan from the previous day, down 100 yuan from the previous week, down 164 yuan from the previous month, and down 649 yuan from the previous year. Prices in different regions also showed different trends [14]. 3.2.2 Profit - Main refineries' refining profit: This cycle, the main refineries' refining profit was 645.47 yuan/ton, up 8.82% from the previous week. The calculated crude oil cost was 3,580 yuan/ton, down 26 yuan from the previous week. The average price of main refined products decreased by 0.2%, but the cost decrease was greater, resulting in a profit increase [19]. - Shandong independent refineries' refining profit: In the week of December 11, 2025, the average comprehensive profit of Shandong independent refineries processing imported crude oil was 442.61 yuan/ton, down 2.66% from the previous week and up 0.84% from the previous year. The average crude oil cost was 2,997 yuan/ton, down 29 yuan, and the comprehensive income was 4,982 yuan/ton, down 40 yuan. The cost decrease was less than the income decrease, so the refining profit decreased [19]. 3.2.3 Supply - Operating rate: This week, the national refinery operating rate was 70.8%, up 0.2% from the previous week. The main refineries' operating rate increased by 0.5 percentage points to 75.1%, and the independent refineries' operating rate decreased by 0.3 percentage points to 64.3%. Shandong independent refineries' average weekly operating rate was 55.9%, down 0.2 percentage points from the previous week [35]. - Maintenance plan: As of December 12, 2025, the total maintenance capacity was 72.4 million tons/year. Guangzhou Petrochemical's maintenance was expected to end, and Jiangsu Xinhai Petrochemical had a new coking unit under maintenance [39]. - Production: This week, gasoline production from both main and independent refineries decreased, while diesel production from main refineries increased and that from independent refineries decreased. The diesel - to - gasoline ratio increased by 0.02 to 1.48. Main refineries produced 1.92 million tons of gasoline, down 20,000 tons (-1.1%) from the previous week, and 2.18 million tons of diesel, up 10,000 tons (+0.3%). Shandong independent refineries' gasoline and diesel production both decreased, with gasoline production at 480,000 tons, down 2.4%, and diesel production at 1.06 million tons, up 0.3% [41][45]. 3.2.4 Sales - This week, the average weekly sales - to - production ratio of Shandong refineries for both gasoline and diesel increased but did not reach the sales - production balance. The gasoline sales - to - production ratio increased by 2 percentage points to 98%, and the diesel sales - to - production ratio increased slightly to 95%. Market sentiment was cautious, with low purchasing enthusiasm for gasoline from downstream vehicle orders, while diesel orders from ships and vehicles increased due to low - price support, and the sales - to - production ratio increased [53]. 3.2.5 Demand - Gasoline demand: The gasoline consumption index, congestion index in 15 Chinese cities, flight scheduling volume, and service industry PMI are used to measure gasoline demand, but specific analysis is not provided in the report [63][64][65][67]. - Diesel demand: The diesel consumption index, manufacturing PMI, cement and asphalt出库量, steel consumption, and express delivery volume are used to measure diesel demand, but specific analysis is not provided in the report [74]. 3.2.6 Inventory - This week, commercial inventories of both gasoline and diesel increased. Gasoline inventory was 10.74 million tons, up 280,000 tons (+2.7%) from the previous week; diesel inventory was 12.39 million tons, up 250,000 tons (+1.8%). Independent refinery inventories increased due to high - level operation after the issuance of crude oil quotas and low market purchasing enthusiasm. Social gasoline inventory increased as some resources were stored, while diesel inventory decreased as some areas still faced a shortage of main refinery resources. Next week, Shandong independent refineries' gasoline inventory is expected to increase slightly, and diesel inventory is expected to increase due to expected production increase and seasonal demand decline [76][80].

Group 1 - The theoretical average comprehensive refining profit of Shandong independent refineries rebounded to 201 CNY/ton as of December 3, reflecting an increase of 62.3 CNY/ton compared to the previous week [1] - The average raw material cost decreased by 74 CNY/ton week-on-week, contributing to the improvement in refining profits [1] - Gasoline wholesale prices rebounded, with the weekly average price increasing by 49 CNY/ton, while diesel prices decreased by 38.2 CNY/ton, leading to mixed revenue changes for other products [1] Group 2 - Future comprehensive income for Shandong independent refineries is expected to rise, although raw material costs may exert pressure on profits [1] - The theoretical average comprehensive refining profit may continue to experience slight rebounds in the near term [1]

Report Overview - Report Title: Crude Oil and Refined Oil Morning Report - Report Date: November 27, 2025 - Research Team: Energy and Chemicals Team of the Research Center 1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - This week, oil prices closed lower. The Russia-Ukraine negotiations made significant progress, and Zelensky and Trump will discuss the peace plan next week, with Russia being open to it, but no substantial discussions have taken place between Russia and the US. The risk premium of gasoline and diesel cracking in Europe and the US has rapidly retreated, and the monthly spread of crude oil has declined, showing a weekly rebound. Global onshore inventories have increased this week, while the total onshore and offshore inventories have slightly decreased, reaching a new high since 2020. US EIA commercial crude oil inventories have decreased, while gasoline and diesel inventories have increased. The number of US drilling rigs and fracturing operations has increased, and the refinery operating rates in Europe and the US have risen. Recently, there is still room for downward correction in US gasoline and European diesel prices. With supply exceeding demand, the strategy of shorting crude oil from a high level is maintained. The Brent price is expected to be between $55 and $60 per barrel in the fourth quarter. Short-term attention should be paid to the US draft of the Russia-Ukraine conflict solution [6]. 3. Summary by Relevant Catalogs 3.1 Daily News - The Caspian Pipeline Consortium has resumed oil shipments at its Black Sea terminal [3]. - The Natural Resources Ministry and the Ministry of Electricity of the Kurdistan Region of Iraq, along with Dana Gas of the UAE, are currently on-site to investigate a drone attack incident [3]. - The US Environmental Protection Agency has finalized a new rule, granting oil and gas operators an additional grace period of over a year to comply with the mandatory requirements of replacing leaky equipment and regularly monitoring methane leaks set by former President Biden. The Trump administration stated that the rule will affect hundreds of oil and gas sources across the country and is expected to save approximately $750 million in compliance costs over the next decade. Methane is a potent greenhouse gas, with a short-term greenhouse effect 80 times that of carbon dioxide. Oil and gas operations are the largest industrial methane emission source in the US, and the Biden-era regulations aimed to reduce methane emissions and the emissions of volatile organic compounds including the carcinogen benzene [3]. 3.2 Inventory - **API Inventory Data**: For the week ending November 21, the API crude oil inventory decreased by 1.859 million barrels, compared with a previous value of an increase of 4.448 million barrels; the API gasoline inventory increased by 0.539 million barrels, compared with a previous value of an increase of 1.546 million barrels; the API refined oil inventory increased by 0.753 million barrels, compared with a previous value of an increase of 0.577 million barrels [4]. - **EIA Report Data**: In the week of November 21, US crude oil exports decreased by 560,000 barrels per day to 3.598 million barrels per day; US domestic crude oil production decreased by 20,000 barrels to 13.814 million barrels per day; commercial crude oil inventories excluding strategic reserves increased by 2.774 million barrels to 427 million barrels, a 0.65% increase; the four - week average supply of US crude oil products was 20.381 million barrels per day, a 0.05% decrease compared to the same period last year; the US Strategic Petroleum Reserve (SPR) inventory increased by 498,000 barrels to 411.4 million barrels, a 0.12% increase; the import of commercial crude oil excluding strategic reserves was 6.436 million barrels per day, an increase of 486,000 barrels per day compared to the previous week [4]. - **Domestic Gasoline and Diesel Inventory**: From November 14 - 20, both gasoline and diesel inventories decreased. Gasoline inventory was 10.2331 million tons, a 1.75% decrease, and diesel inventory was 12.2708 million tons, a 4.25% decrease. The inventories of both gasoline and diesel in major refineries and social sectors decreased, while those in local refineries increased. The comprehensive refining profit of major refineries rebounded month - on - month, and the comprehensive profit of local refineries fluctuated [5]. - **Fujairah Refined Oil Inventory**: As of the week ending November 24, the total refined oil inventory in Fujairah, UAE increased by 197,000 barrels compared to the previous week. The light distillate inventory decreased by 934,000 barrels to 6.291 million barrels, the medium distillate inventory increased by 205,000 barrels to 3.393 million barrels, and the heavy residual fuel oil inventory increased by 926,000 barrels to 11.165 million barrels [5]. 3.3 Weekly View - This week, oil prices closed lower. The Russia-Ukraine negotiations made significant progress, and Zelensky and Trump will discuss the peace plan next week, with Russia being open to it, but no substantial discussions have taken place between Russia and the US. The risk premium of gasoline and diesel cracking in Europe and the US has rapidly retreated, and the monthly spread of crude oil has declined, showing a weekly rebound. Global onshore inventories have increased this week, while the total onshore and offshore inventories have slightly decreased, reaching a new high since 2020. US EIA commercial crude oil inventories have decreased, while gasoline and diesel inventories have increased. The number of US drilling rigs and fracturing operations has increased, and the refinery operating rates in Europe and the US have risen. Recently, there is still room for downward correction in US gasoline and European diesel prices. With supply exceeding demand, the strategy of shorting crude oil from a high level is maintained. The Brent price is expected to be between $55 and $60 per barrel in the fourth quarter. Short-term attention should be paid to the US draft of the Russia-Ukraine conflict solution [6].

Core Viewpoint - The oil market is under pressure with a significant decline in crude oil prices in October, leading to lower retail prices and weak demand for gasoline and diesel, particularly in Shandong province [1][2][4]. Group 1: Oil Price Trends - In October, the average WTI price decreased by 5.45% and Brent by 5.37%, reflecting a downward trend in international oil prices [2]. - The oil market experienced a decline in early October due to oversupply and macroeconomic risks, but prices rebounded later in the month due to geopolitical and macroeconomic factors [2][4]. Group 2: Domestic Market Impact - The retail price of refined oil in Shandong saw two reductions in October, negatively impacting gasoline and diesel prices [4]. - The average gasoline ex-factory price in Shandong fell by 510 CNY/ton (3.94% decrease), while diesel prices dropped by 185 CNY/ton (2.62% decrease) [4]. Group 3: Price Differentials - The average gasoline crack spread in Shandong was 867.91 CNY/ton, down 4.52% month-on-month, while the diesel crack spread increased by 9.39% to 787.87 CNY/ton [4]. - The average theoretical wholesale-retail price differential for gasoline rose by 8.35% to 2051.06 CNY/ton, and for diesel, it increased by 4.12% to 1434.78 CNY/ton [6]. Group 4: Future Outlook - Looking ahead to November, crude oil prices are expected to remain under pressure due to weak demand and increased supply from Saudi Arabia, which may lead to a decline in refined oil prices [7]. - Gasoline demand is anticipated to remain weak without holiday support, while diesel demand may see slight improvement due to construction activities and e-commerce logistics [7].

Core Insights - In October, domestic refining profits in China increased nearly twofold year-on-year, driven by lower international oil prices and reduced raw material costs [1][3] - Despite a decline in refining product prices and revenues, the cost reductions were more significant, leading to improved refining margins [4][5] Group 1: Refining Profitability - Domestic refining profit in October was 248 CNY/ton, an increase of 81 CNY/ton or 48.5% month-on-month, and a rise of 235 CNY/ton or 1.74 times year-on-year [1] - The overall refining profit is expected to continue to see slight month-on-month increases in November due to slower transmission of cost declines [4][5] Group 2: Cost and Revenue Dynamics - The comprehensive refining cost in October was 4925 CNY/ton, down 4.74% month-on-month and 6.18% year-on-year [3] - Average revenue from refining products in October was 5173 CNY/ton, which decreased by 3.07% month-on-month and 1.71% year-on-year [4] - The average price of gasoline fell by 3.94% month-on-month, while diesel prices decreased by 2.67% month-on-month [4] Group 3: Market Outlook - In November, gasoline demand is expected to remain weak due to strong competition from electric vehicles, while diesel demand may hold steady due to construction activities and logistics needs [5] - Overall, refining product revenues are anticipated to decline in November, but the decrease may be less than that of costs, potentially allowing for continued slight increases in refining profits [5]

Group 1 - Oil prices stabilized at the end of the week, with the market closely monitoring the upcoming OPEC+ meeting and geopolitical developments [1] - The U.S. military has significantly increased its presence in the Caribbean, including the redeployment of the USS Ford carrier group near Venezuela, amid reports of imminent military action against Venezuelan military facilities [1] - Venezuela's current oil export volume is approximately 700,000 to 900,000 barrels per day [1] Group 2 - OPEC+ is expected to discuss a third consecutive month of production increases, with a proposed increase of 137,000 barrels per day, aligning with market expectations [3] - The oil market is facing potential oversupply in the coming months, influenced by complex political factors and U.S. sanctions on Russian oil producers [3] - Brent crude prices have fallen over 13% this year due to increased supply outpacing demand growth [3] Group 3 - Despite the oversupply in the crude oil market, the refined oil market is performing strongly, particularly following U.S. sanctions on Russian oil companies [4] - Diesel prices have reached their highest premium over crude oil since early 2024, boosting refining profits and potentially stimulating crude oil demand [4]

Core Viewpoint - TotalEnergies (TTE.US) anticipates a slight increase in third-quarter profit and cash flow despite a decline in oil prices, driven by increased oil and gas production and improved refining margins [1] Group 1: Financial Performance - The company expects a 4% year-over-year increase in oil and gas production, reaching 2.5 million barrels of oil equivalent per day [1] - Performance and cash flow from exploration and production are projected to grow over 4% compared to the second quarter [1] - Downstream business performance and cash flow are expected to improve by $400 million to $600 million year-over-year due to expanded refining margins in Europe [1] Group 2: Market Reaction - Following the positive trading update, TotalEnergies' stock price rose by as much as 2.6% during intraday trading [1] Group 3: Operational Metrics - The cash flow from liquefied natural gas and power businesses is expected to remain stable compared to the previous three months [1] - The company anticipates a reduction in the debt-to-equity ratio by 0.5% to 1% due to a positive contribution from expected operating capital of $1.2 billion to $2 billion [1]

Core Insights - The traditional peak season for the refining industry in September did not materialize as expected, leading to a significant decline in profits due to dual pressures from costs and revenues [1][2][3] Summary by Sections Profit Decline - In September, the average refining profit for domestic refineries was 167 yuan/ton, a substantial decrease of 174 yuan/ton, representing a drop of 50.99% month-on-month and 10.65% year-on-year [1][2] - The average revenue from refined products was 5,337 yuan/ton, down 92 yuan/ton, a decline of 1.69% [1][2] - The comprehensive refining cost increased to 5,170 yuan/ton, up 82 yuan/ton, marking a rise of 1.61% [1][2] Supply and Demand Imbalance - The weak revenue was attributed to an exacerbated supply-demand imbalance, with many refined products experiencing oversupply and weak demand [3] - Key factors included weak demand for solvent oil and asphalt, uncertainty in international oil prices affecting market confidence, and adverse weather conditions in southern regions [3] Regional Insights - In Shandong, independent refineries saw a significant drop in profits, with the processing profit for imported crude oil falling to 132.83 yuan/ton, down 182.75 yuan/ton, a decline of 57.91% [3] - Despite an increase in operating rates among Shandong refineries, the release of production capacity did not translate into higher profits [3] October Outlook - Analysts expect a slight increase in refining profits in October due to anticipated relief on the cost side and seasonal demand support [6] - The international oil price is expected to face downward pressure, which could lower procurement costs for domestic refineries [6] - Diesel demand is projected to remain strong due to logistics and agricultural needs, while gasoline consumption may face seasonal declines after the holidays [6][7] - There are concerns about potential raw material shortages for Shandong refineries due to rapid usage of import quotas and maintenance schedules [7]