Report Summary 1) Report Industry Investment Rating - High - sulfur fuel oil: Short - term neutral, leaning towards bearish [3] - Low - sulfur fuel oil: Short - term neutral, leaning towards bearish [3] - Cross - variety: None [3] - Cross - period: None [3] - Spot - futures: None [3] - Options: None [3] 2) Core View of the Report - The crude oil price has rebounded from the low level recently, but the expectation of oversupply in the oil market has not reversed, and the resistance above still exists. The fuel oil market has limited overall drivers with a mix of long and short factors [2]. - The cracking spread of high - sulfur fuel oil has stabilized and rebounded recently, but the supply is still abundant, and the new 164,000 tons of FU futures warehouse receipts this week, with a total of 234,000 tons, suppress the market [2]. - The supply of low - sulfur fuel oil in Kuwait and Nigeria is expected to increase due to changes in refinery maintenance. Although the end - of - year demand for marine fuel is boosted and there is component diversion by gasoline and diesel, the supply is abundant, and the valuation will be continuously suppressed [2]. 3) Summary by Related Catalogs Market Analysis - The main contract of SHFE fuel oil futures closed down 0.08% at 2,480 yuan/ton, and the main contract of INE low - sulfur fuel oil futures closed up 0.47% at 3,014 yuan/ton [1]. Strategy - High - sulfur fuel oil: Short - term neutral, leaning towards bearish [3] - Low - sulfur fuel oil: Short - term neutral, leaning towards bearish [3] - Other strategies (cross - variety, cross - period, spot - futures, options): None [3] Charts - There are 18 charts in total, including Singapore high - sulfur and low - sulfur fuel oil spot prices, swap contracts, month - to - month spreads, and domestic fuel oil and low - sulfur fuel oil futures closing prices, trading volumes, and open interests [4]

Report Industry Investment Ratings - Crude oil: ★☆☆, indicating a bullish bias but limited trading opportunities on the market [1] - Fuel oil: ★☆☆, suggesting a bullish bias but limited trading opportunities on the market [1] - Low-sulfur fuel oil: ★☆☆, meaning a bullish bias but limited trading opportunities on the market [1] - Asphalt: ★☆☆, showing a bullish bias but limited trading opportunities on the market [1] - Liquefied petroleum gas: ☆☆☆, indicating a relatively balanced short-term trend with poor market operability, suggesting a wait-and-see approach [1] Core Viewpoints - The market is bearish on crude oil prices in the short term and recommends shorting on price rebounds [2] - The high-sulfur fuel oil market is affected by supply and demand factors, while the low-sulfur fuel oil market has improved fundamentals. The strategy of widening the high-low sulfur spread has been gradually realized and can be considered for timely profit-taking [2] - The asphalt market is bearish in the medium and long term due to weak fundamentals [3] - The liquefied petroleum gas market is expected to fluctuate upward due to tightened supply and demand [4] Summary by Directory Crude Oil - Overnight international oil prices dropped significantly, with the SC12 contract falling 3.66%. The OPEC November report adjusted the non-OPEC+ supply growth rate upward and maintained the demand growth rate, shifting the balance sheet from a shortage to a balance, amplifying market pessimism. Last week, the US API crude oil inventory increased by 1.3 million barrels [2] - Since November, the crude oil calendar spread and spot premium have weakened again. Considering that the most relaxed quarter of the balance sheet, Q1 2026, has not yet arrived, there is still room for oil prices to decline this year [2] Fuel Oil & Low-Sulfur Fuel Oil - Affected by the pessimistic sentiment from the OPEC November report, fuel oil prices followed the cost side down significantly [2] - The main support for high-sulfur fuel oil comes from the supply risk caused by the constraints on Russian refinery capacity, especially with the escalation of the Russia-Ukraine conflict. However, the continuous production increase by OPEC+ has led to an increase in high-sulfur resources in the Middle East, offsetting some of the impact. On the demand side, the power generation peak season in the Middle East has ended, the Palestine-Israel conflict has eased, and the market expects the first batch of crude oil quotas in 2026 to be issued ahead of schedule, which may further weaken the feedstock demand of local refineries [2] - The low-sulfur market benefits from the alleviation of supply pressure due to unstable overseas refinery operations. The Russia-Ukraine conflict has pushed up the crack spreads of gasoline and diesel, providing support for low-sulfur fuel oil from the perspective of production switching. In the fourth quarter, it is the peak season for marine fuel, and the phased improvement in Sino-US trade relations has improved the fundamentals of low-sulfur fuel oil compared to the third quarter. The previously arranged strategy of widening the high-low sulfur spread has been gradually realized, and timely profit-taking can be considered [2] Asphalt - Against the backdrop of a sharp drop in crude oil prices today, the decline of asphalt has slowed down, and the 2601 contract has some support at 3,000 yuan/ton [3] - The lower-than-expected shipment volume not only disproves the expectation of rush construction demand in the final year of the "14th Five-Year Plan" but also sends a negative signal that demand is lower than the same period last year. This week, the destocking of commercial inventories has shown signs of slowing down, and the year-on-year increase in social inventories has widened after reaching an inflection point at the end of October. In the medium and long term, the bearish fundamentals still suppress the BU [3] Liquefied Petroleum Gas - The international liquefied gas market has been strong recently, with tight supply of imported resources [4] - The improved profitability of butane dehydrogenation units has boosted the enthusiasm of downstream chemical enterprises to start operations, and the significant cooling in many places has improved the demand for combustion. The inventory rates of refineries and ports have decreased. The tightening of supply and demand has supported the LPG to fluctuate upward [4]