Report Summary 1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - The risk appetite for crude oil has improved, and there may be a short - term continuation of the rebound [1] 3. Summary by Relevant Catalogs 3.1 International Crude Oil - WTI November crude oil futures rose $0.59 per barrel, or 1.00%, to $59.49 per barrel; Brent December crude oil futures rose $0.59 per barrel, or 0.94%, to $63.32 per barrel; SC2512 crude oil futures rose $0.10 per barrel, or 0.02%, to $453.80 per barrel [1] 3.2 Product Oil Arbitrage - **Gasoline**: Routes from Europe to New York and Mediterranean to New York are open, while routes from Europe to Mexico and Asia to Mexico are closed. The European ARA region has cost advantages in blending components, but the US RVO compliance cost needs to be considered. Mediterranean low - sulfur gasoline needs adjustment to meet US standards [2] - **Diesel**: Most routes are closed, mainly due to factors such as freight, sufficient local supply in Europe, and weak demand in the Mediterranean region. Only the route from South Korea to the US West Coast is open because of tight Asian supply and strong US demand [2] - **Aviation Fuel**: The route from the Arab Gulf to the Mediterranean is open due to a slight increase in demand during the Mediterranean summer tourist season, while the route from the Arab Gulf to Northwest Europe is closed because of slow demand recovery and uneconomical shipping distances [2] - **Fuel Oil**: Routes from Northwest Europe and USGC to Singapore are closed because of oversupply in the Singapore market, unfavorable East - West spreads, and high long - distance transportation costs [2] - **Naphtha**: The route from the USGC to Japan is open as US naphtha has a price advantage and Asian chemical demand is stable, while the route from the Arab Gulf to Japan is closed due to weak Asian petrochemical demand and compressed cracking profits [2][4] 3.3 Crude Oil Key Indicators - **Price Index**: The global energy price index is on an upward trend, driven by geopolitical factors [4] - **Term Structure**: The M1 - M2 crude oil spread shows near - month contango, indicating relatively sufficient market supply [4] - **Positioning**: NYMEX WTI fund net positions show long - position reduction due to macro - economic concerns, and NYMEX RBOB fund net positions have increased volatility because of uncertain gasoline demand after the summer driving season [4] - **Regional Spreads**: The Atlantic Basin crude oil spread difference has narrowed, and the Asian crude oil spread has weakened because of compressed Asian refinery profit margins and reduced procurement willingness [4] 3.4 Crude Oil Arbitrage - **USGC**: Most configurations are closed. Light - sweet crude oil processing profits are affected by narrowing product cracking spreads, and heavy crude oil processing economy is dragged down by fuel oil value [5] - **USAC**: The configuration using Saharan Blend for cracking is open as African light - sweet crude oil has a quality premium on the US East Coast [5] - **Northwest Europe**: Configurations using Eagle Ford and Azeri Light for cracking are open. US light crude oil has a significant cost advantage in the European market [5] - **Singapore**: The configuration using Murban for cracking is open. Middle - East light crude oil maintains marginal economic viability in the Asian market [5] - **China**: Configurations using Napo and Mars for coking are open. South American heavy crude oil has processing advantages in Asian coking units, and US Gulf of Mexico medium - sulfur crude oil has stable Asian demand [5] 3.5 Refining Margins - **USGC**: FCC&HCU with WTI MEH has above - average margins, and Coking with Mars has relatively high margins due to the structural advantage of processing heavy crude oil [6] - **USAC**: RFCC with Dated Brent has medium margins as East Coast refineries face competition from imported products [6] - **Northwest Europe**: Full - conversion with Dated Brent has low margins because of weak European diesel demand and intense competition in chemical products [6] - **Singapore**: The cracking configuration with Dubai has medium margins. Asian light - product demand supports profit margins, but fuel oil value is low [6] 3.6 Key Market News - Trump said he was willing to lift sanctions on Iran if they were willing to talk. World leaders participated in the signing ceremony of the Gaza peace agreement during the Sharm El - Sheikh Summit [9] - OPEC maintained its global crude oil demand growth forecasts for this year and next year and expected the market supply gap to narrow significantly in 2026. OPEC+ increased daily production by 630,000 barrels to 43.05 million barrels in September [9] - OPEC predicted that global oil demand would increase by 1.3 million barrels per day in 2025 and 1.38 million barrels per day in 2026 [9] - OPEC's September crude oil production increased by 524,000 barrels per day to 28.44 million barrels per day. Production in most member countries increased, while Nigeria's production decreased [9] 3.7 Trend Intensity - The crude oil trend intensity is 1, indicating a neutral - to - slightly - strong trend [8]

Core Viewpoint - The imposition of a 10% tariff by the U.S. on energy imports from Canada is expected to increase crude oil costs for U.S. refiners, leading them to source crude from other regions, which will benefit Asian refining companies through improved margins from increased product exports [3][4]. Group 1: Impact on U.S. and Asian Refiners - U.S. refiners, primarily processing heavy crude oil, will face higher raw material costs due to the tariff, potentially increasing costs by $6 to $8 per barrel [5]. - As a result, U.S. refiners may rely more on Asian product supplies, benefiting Asian refiners from the short-term increase in refining margins [4][5]. - However, the upward trend in margins for Asian refiners is expected to be temporary, as tightening global heavy crude supply will eventually raise processing costs for refiners worldwide [4]. Group 2: Global Oil Market Dynamics - The price differential between WTI low-sulfur and high-sulfur crude has narrowed since November of the previous year, indicating rising heavy crude prices and shrinking refining margins [4]. - The heavy-light crude price differential in Asia may also follow a similar trend in the second half of the year [4]. - The tariff could lead to increased competition among global refiners for heavy crude procurement, potentially erasing the cost advantages for Asian refiners [5]. Group 3: China's Fuel Export Outlook - In 2024, China's total exports of gasoline, diesel, and aviation fuel are projected to reach 36.7 million tons, a decrease of 12.6% from the previous year [7]. - The first batch of refined oil export quotas for 2025 announced by China is set at 1.9 million tons, remaining stable compared to the previous year [7]. - If the U.S. increases fuel imports from Asia, this situation may change in the short term [7].