Report Industry Investment Rating No information provided. Core Viewpoints of the Report - Short - term oil prices may test the lower limit of the range again, and in the medium - term, attention should be paid to geopolitical risks and inventory inflection points. OPEC has adjusted its forecast for the global oil market in the third quarter from a supply shortage to a supply surplus due to higher - than - expected US production and increased supply from the organization itself. There is a need to be vigilant about the impact of the UK's sanctions on Russia and geopolitical conflicts in the Middle East on the market [6]. Summary by Relevant Catalogs 1. Daily Market Summary a. Crude Oil Futures Market Data Changes - On November 12, 2025, WTI and Brent futures prices rebounded significantly, with WTI closing at $60.99 per barrel (previous day $59.53), a gain of 2.45%, and Brent at $65.09 per barrel (previous day $63.57), a gain of 2.39%. SC crude oil prices fell slightly to 458.8 yuan per barrel (previous day 460.4 yuan). The SC - Brent spread changed from $1.08 per barrel to - $0.66 per barrel, and the SC - WTI spread narrowed from $5.12 per barrel to $3.44 per barrel, indicating the relative weakness of domestic SC crude oil compared to international oil prices. The Brent - WTI spread strengthened to $4.1 per barrel (previous day $4.04), suggesting tighter supply - demand in the European market [2]. b. Supply - Chain Supply, Demand, and Inventory Changes - **Supply**: Russia's seaborne oil product exports in October remained at 7.8 million tons, showing supply resilience. Chevron plans to increase production by 2% - 3% annually by 2030, and the possible restart of oil drilling leases off the California coast in the US may lead to a marginal loosening of long - term supply. However, short - term disruptions remain, such as the UK's plan to restrict LNG export services to Russia from 2026 and the potential impact of the non - approval of Lukoil's sanction waiver extension [3]. - **Demand**: Refinery demand is differentiated. Japan's refinery operating rate dropped slightly to 90.6% (previous week 91.4%), and the decrease in US gasoline inventory slowed, indicating a marginal slowdown in demand. Indian state - owned refiners' procurement of Russian ESPO crude shows support in Asian spot demand, and the US strategic petroleum reserve's purchase of 1 million barrels reflects clear policy support [4]. - **Inventory**: US API crude inventory increased by 1.3 million barrels (previous value + 6.52 million barrels), with a slower inventory build - up but still at a high level. Product inventories decreased, reflecting seasonal demand shifts. Japan's commercial crude inventory decreased by 354,000 liters to 10.38 million liters, but gasoline and kerosene inventories increased, showing a differentiated terminal replenishment rhythm [5]. c. Price Trend Judgment - Short - term prices may test the lower limit of the range again, and in the medium - term, attention should be paid to geopolitical risks and inventory inflection points. OPEC adjusted its third - quarter global oil market forecast from a shortage to a surplus, with a supply surplus of 500,000 barrels per day in the third quarter. There is a need to be vigilant about the UK's sanctions on Russia and geopolitical conflicts in the Middle East [6]. 2. Supply - Chain Price Monitoring a. Crude Oil - Futures prices: SC rose 1.61% to 466.2 yuan per barrel, WTI fell 4.19% to $58.48 per barrel, and Brent fell 3.63% to $62.73 per barrel. - Spot prices: OPEC's basket price remained unchanged, while some other spot prices had slight fluctuations. - Spreads: SC - Brent, SC - WTI, and Brent - WTI spreads all changed, with significant increases in SC - Brent and SC - WTI spreads. - Inventory: US commercial crude, Cushing, strategic reserve, and API inventories all increased. US refinery operating rate decreased slightly, and crude processing volume increased slightly [8]. b. Fuel Oil - Futures prices: FU rose 0.82% to 2,693 yuan per ton, LU rose 1.50% to 3,311 yuan per ton, and NYMEX fuel oil fell 4.28% to 247.13 cents per gallon. - Spot prices: Some spot prices of fuel oil increased slightly, while others remained unchanged. - Spreads: Singapore and Chinese high - low sulfur spreads changed, with an increase in the Chinese high - low sulfur spread [9]. 3. Industry Dynamics and Interpretation a. Supply - Russia's seaborne oil product exports in October were 7.804 million tons, similar to September. Chevron plans to increase oil and gas production by 2% - 3% annually by 2030. Indonesia expects an oil production of about 607,000 barrels per day in 2025. The Trump administration may open the California coast for oil drilling leases [10][11]. b. Demand - Indian state - owned refiner Indian Oil Corporation plans to purchase Russian ESPO and Sokol crude for early next year [12]. c. Inventory - US API inventories showed changes in various products, with a decrease in some and an increase in others. The US Energy Department purchased about 1 million barrels of crude for the strategic petroleum reserve. Japan's commercial crude inventory decreased, while gasoline and kerosene inventories increased [13][14]. d. Market Information - Lukoil applied to the US Treasury for an extension of the trading deadline. UK's BP is in talks to sell Castrol. UK plans to ban services for Russian LNG exports from 2026. Crude - related futures prices fell significantly [15].

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **global oil market** and its dynamics, particularly focusing on the impact of geopolitical events and economic factors on oil prices and supply chains [1][2][3]. Core Insights and Arguments 1. **Oil Price Fluctuations**: - In October, international oil prices experienced significant volatility, with Brent crude oil dropping to a six-month low of **$61.01** before rebounding. The expected price range for Q4 is between **$60 and $70**, with an average of approximately **$65** [1][10]. 2. **Impact of Sanctions on Russia**: - New sanctions targeting major Russian oil producers, **Rosneft** and **Lukoil**, are expected to reduce Russian oil exports by at least **1 million barrels per day**. These companies account for about **50%** of Russia's oil exports [5][6][8]. - The sanctions will significantly impact global supply chains, particularly affecting imports from Russia to China and India, which are expected to decrease by a combined **1 million barrels per day** [7][8]. 3. **OPEC's Role**: - OPEC has at least **3 million barrels per day** of spare capacity and may consider a slight increase in production by **137,000 barrels per day** in December to stabilize the market. However, a significant increase is not in their interest [1][12][20]. 4. **Global Oil Inventory Levels**: - Global commercial oil inventories are currently low, with U.S. inventories significantly below the five-year average, providing a support level for oil prices. The total inventory, excluding China, is about **1.9 billion barrels**, which is **15 million barrels** lower than the previous year [13][10]. 5. **Seasonal Demand Variations**: - Global energy demand exhibits seasonal fluctuations, with a notable decline expected after the peak demand periods in September and October. This seasonal change is anticipated to lead to a decrease in demand by approximately **500,000 barrels per day** in Q4 [14]. 6. **Macroeconomic Factors**: - Positive macroeconomic signals include a potential easing of U.S.-China tensions, which could stabilize market expectations. The IMF projects a global economic growth rate of **3.0%** for 2025 and **3.1%** for 2026, indicating a stable economic environment for oil markets [15][17]. 7. **Future Oil Price Predictions**: - For 2026, the average price of Brent crude is expected to remain between **$60 and $70**, with a baseline scenario of **$65**. Key factors influencing this include geopolitical events and economic policies [18][22]. 8. **Investment Trends**: - Global upstream oil investment is projected to be around **$600 billion** in 2026, reflecting a **1.5%** year-on-year decline. Major reductions are expected in Europe, Asia-Pacific, and North America, while unconventional resource investments in South America are anticipated to increase [19]. Other Important Insights - **China's Chemical Industry**: The chemical sector in China is expected to hit a low point around **2027-2028**, with gradual recovery thereafter. Ethylene production capacity is projected to increase from **65 million tons** to **90 million tons** by 2030 [28]. - **Shipping Market Changes**: Post-sanction, the global oil shipping market has adapted, with longer shipping routes being utilized and a decrease in compliant vessels, which supports the demand for oil transportation [31]. This summary encapsulates the critical insights and projections regarding the oil market, highlighting the interplay between geopolitical events, economic conditions, and industry dynamics.

包括总部位于巴黎的国际能源署(IEA)在内的行业观察机构，一年多来一直预测石油供应将大幅增加。 他们认为，石油输出国组织及其盟友(OPEC+)以及非欧佩克国家的新增原油产量，将远超正在放缓的需 求增长。目前原油期货正迈向连续第三个月下跌，顶级交易商也已做好油价进一步下滑的准备。 挪威第三大油气公司瓦尔能源(Var Energi ASA)预计，明年石油供需前景将趋于稳定，油价不会大幅跌 破每桶60美元。该公司首席执行官尼克.沃克(Nick Walker)周二表示，"短期内可能会出现短暂的供应过 剩，但展望明年，我认为供需平衡将逐步恢复。""石油在未来很长一段时间内仍将是必需能源，而行业 目前的投资规模严重不足。" 瓦尔能源今年已有多个油田投产，包括巴伦支海的约翰.卡斯伯格油田(Johan Castberg)，以及6月启动的 巴尔德X油田(Balder X)。这两个油田的产量将推动该公司第四季度日均产量升至约43万桶油当量。沃 克表示，为了在本十年末维持现有产量水平，公司将在年底前批准共10个新项目，目前已有4个项目获 得通过，其盈亏平衡点均低于每桶35美元。 这家油气公司第三季度息税前利润(EBIT)增至10. ...

Investment Rating - The report maintains a "Buy" recommendation for key companies in the oil and gas sector, specifically China National Petroleum Corporation, China Petroleum & Chemical Corporation, China National Offshore Oil Corporation, Zhongman Petroleum, and New Natural Gas [4]. Core Views - The geopolitical premium on crude oil has weakened, with OPEC+ supply dominating in the short term. The report highlights that despite pressures on oil prices due to increased OPEC+ production, there remains a bottom support for prices [1][8]. - The report suggests that the market's main influences on oil prices are the geopolitical situation in the Middle East and the supply intensity from OPEC+, rather than the recent developments in U.S.-China trade tensions or India's oil import policies [1][8]. Summary by Sections Industry Dynamics - As of October 17, the U.S. dollar index decreased to 98.55, while Brent crude oil futures settled at $61.29 per barrel, down 2.30% week-on-week, and WTI futures at $57.54 per barrel, down 2.31% [2][9]. - U.S. crude oil production rose to 13.64 million barrels per day, an increase of 10,000 barrels from the previous week, while refinery throughput decreased to 15.13 million barrels per day, down 117,000 barrels [10][11]. Company Performance - The report forecasts earnings per share (EPS) for key companies: China National Petroleum Corporation (0.90 CNY for 2024), China National Offshore Oil Corporation (2.90 CNY for 2024), and China Petroleum & Chemical Corporation (0.41 CNY for 2024) [4]. - The report indicates that the petrochemical sector is experiencing a "de-involution" policy, recommending attention to industry leaders with stable performance and high dividends, such as China National Petroleum and China Petroleum & Chemical [3][11]. Market Trends - The report notes that the oil and gas sector has seen a decline of 2.8% as of October 17, underperforming the broader market indices [12][16]. - The report highlights that the refining sub-sector had the highest weekly increase of 0.2%, while other petrochemical sub-sectors experienced declines, with the largest drop being 7.9% [16][17].

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Global Oil Market - **Key Players**: OPEC+ members, specifically Saudi Arabia and UAE Core Insights and Arguments 1. **Production Adjustments**: OPEC+ partners will increase oil production by 137,000 barrels per day (kb/d) in November, maintaining the same pace as October, despite ongoing voluntary cuts of 1.65 million barrels per day (Mb/d) [1][2] 2. **Seasonality Impact**: The expected production increase is modest and counter-seasonal, as it occurs during a period of typically lower demand. The bulk of the increase is anticipated to come from Saudi Arabia (500 kb/d) and the UAE (144 kb/d) [2] 3. **Price Outlook**: Near-term risks for oil prices remain to the downside, with projections suggesting Brent crude could fall below $60 per barrel if supply continues to outpace demand, potentially reaching $62 per barrel in 4Q25/1Q26 [3] 4. **Supply Surplus**: If OPEC+ maintains current production levels, a surplus of approximately 2.7 Mb/d could develop in 1Q26, which would further pressure prices [3] 5. **Long-term Implications**: The current production decisions may indicate limited spare capacity within OPEC+, which could help stabilize prices in the long run by curbing non-OPEC supply growth [3] Additional Important Information - **Next Meeting**: The next OPEC+ meeting is scheduled for November 2, where further adjustments to production may be discussed [1] - **Market Reactions**: Initial market reactions to the production increase may be slightly positive, but the overall sentiment remains cautious due to potential supply disruptions and market conditions [3]

Investment Rating - The report maintains a "Buy" rating for key companies in the oil and gas sector, including China National Petroleum Corporation, China National Offshore Oil Corporation, Sinopec, Zhongman Petroleum, and New Natural Gas [5]. Core Insights - The report emphasizes that oil prices have bottom support in the short term, regardless of the outcomes of the US-Russia meeting [1][9]. - It highlights that major international oil agencies have raised their supply growth forecasts for 2025, indicating a potential oversupply situation [2][10]. - The report suggests that the US oil production is on the rise, which could impact global oil prices and supply dynamics [4][11]. Summary by Sections Industry Overview - The report discusses the geopolitical context surrounding oil prices, particularly the US-Russia meeting and its implications for oil supply and demand [1][9]. - It notes that OPEC's production increased by 262,000 barrels per day in July, with varying contributions from member countries [1][9]. Supply and Demand Forecasts - EIA and IEA have adjusted their 2025 supply and demand growth forecasts, with EIA raising supply by 47,000 barrels per day and demand by 18,000 barrels per day, leading to a projected oversupply of 1.64 million barrels per day [2][10]. - OPEC's forecast indicates a supply growth adjustment of 10,000 barrels per day, while IEA has raised supply growth by 40,000 barrels per day but lowered demand growth by 20,000 barrels per day [2][10]. Price Trends - As of August 15, Brent crude oil futures settled at $65.85 per barrel, down 0.87% week-on-week, while WTI futures settled at $62.80 per barrel, down 1.69% [3][11]. - The report also notes a decline in natural gas prices, with NYMEX natural gas futures closing at $2.92 per million British thermal units, down 2.44% [3][11]. Company Performance and Recommendations - The report recommends focusing on companies with strong resource advantages and high dividend yields, such as China National Petroleum Corporation, China National Offshore Oil Corporation, and Sinopec [4][14]. - It also highlights the growth potential of Zhongman Petroleum and New Natural Gas, which are encouraged by domestic policies to increase oil and gas reserves [4][14].

Group 1 - OPEC raised its global oil demand forecast for next year while lowering supply growth expectations from the US and other non-OPEC+ producers, indicating a tightening market supply outlook [1] - OPEC+ aims to regain market share by increasing production after years of supporting the market through production cuts [1] - The organization expects global oil demand to increase by 1.38 million barrels per day in 2026, an upward revision of 100,000 barrels per day from previous forecasts, while maintaining the demand outlook for this year [1] Group 2 - OPEC slightly raised its global economic growth forecast for this year to 3.0%, citing trade agreements signed by the Trump administration and better-than-expected economic performance in India, China, and Brazil [1] - The report indicates that oil supply from non-OPEC+ countries is expected to increase by approximately 630,000 barrels per day in 2026, down from the previous forecast of 730,000 barrels per day [1] - The report also predicts a decrease of 100,000 barrels per day in US tight oil production for 2026, compared to the previous forecast of no change [2]

Group 1 - OPEC has raised its global oil market forecast, expecting a tighter market next year due to accelerated demand growth and a slowdown in supply expansion from non-OPEC producers [1][4] - The organization has increased its 2026 global oil demand growth forecast by 100,000 barrels per day to 1.4 million barrels per day, slightly above this year's level, while simultaneously lowering the supply growth forecast from non-OPEC countries by the same amount [1][4] - If OPEC and its allies do not further restore paused production, global oil inventories are projected to decrease significantly next year, with a decline of nearly 1.2 million barrels per day [1][4] Group 2 - Market sentiment towards OPEC's optimistic forecast is cautious, as the organization had to make six monthly downward adjustments last year, ultimately reducing its demand forecast by 32% [5] - Analysts suggest that OPEC may be underestimating the potential negative impacts of global economic slowdown, accelerated energy transition, and the rise of electric vehicles on oil demand [5] - Despite uncertainties, Saudi Arabia's recent policy decisions indicate a shared optimism with OPEC's forecasts, as the country and its partners decided to accelerate the restoration of 2.2 million barrels per day of production a year ahead of schedule [5]

Report Industry Investment Ratings - Crude oil: ★★★ (indicating a clear upward trend and a relatively appropriate investment opportunity) [1] - Fuel oil: ★☆☆ (indicating a bullish bias but limited operability on the trading floor) [1] - Low - sulfur fuel oil: ★☆☆ (indicating a bullish bias but limited operability on the trading floor) [1] - Asphalt: ★☆☆ (indicating a bullish bias but limited operability on the trading floor) [1] - Liquefied petroleum gas (LPG): ★☆☆ (indicating a bullish bias but limited operability on the trading floor) [1] Core Views - The oil market has a continuous inventory build - up pressure, and the balance sheet shows that the supply - demand surplus in the fourth quarter is about twice that of the first three quarters. It is recommended to buy out - of - the - money options on SC2510 when the price drops [2]. - The decline in crude oil leads to a continued weakness in fuel - related futures. The low - sulfur fuel oil market is under pressure in the short term, and the high - low sulfur fuel oil price spread is expected to continue to narrow [3]. - The asphalt supply pressure is currently limited, demand has room for recovery, and the low inventory supports the price. The BU crack spread is expected to be strong in the near term [4]. - The LPG price has stabilized slightly. The refinery gas price has room for further decline. The market is in a low - level oscillation after initially pricing in the negative expectations [5]. Summaries by Related Categories Crude Oil - Since the third quarter, global oil inventories have increased by 1.1%, similar to the first and second quarters. The supply - demand surplus in the fourth quarter is expected to double compared to the previous three quarters. After the geopolitical risk concerns eased last week, the market focused on the supply - demand bearish expectations. Attention should be paid to the US - Russia leaders' meeting this Friday, and a double - buy strategy for out - of - the - money options on SC2510 is recommended [2]. Fuel Oil & Low - Sulfur Fuel Oil - The decline in crude oil causes the fuel - related futures to remain weak. In August, the Asian fuel oil market has abundant arrivals and weak ship - bunkering demand. The Singapore fuel oil inventory remains high, and the diesel crack spread has dropped by $7 per barrel since mid - July. The low - sulfur fuel oil market is under pressure, and the high - low sulfur fuel oil price spread is expected to narrow [3]. Asphalt - Today, oil product futures generally declined, with BU having the smallest decline. The August production plan decreased significantly compared to July, but some refineries exceeded the production plan. The demand recovery in South China is delayed, and the northern demand is weak. The refinery shipments are flat compared to last week, with the cumulative year - on - year increase rising by 1 percentage point. The overall commercial inventory increased slightly but remains at a low level in recent years. The supply pressure is limited, and the low inventory supports the price. The BU crack spread is expected to be strong [4]. LPG - The overseas LPG export market remains loose, but the increase in East Asian chemical procurement provides support. The import volume increased at the beginning of August, and the refinery gas price has room for further decline. The chemical profit margin and the ratio to naphtha are at a good level. After the high - operating - rate period, the sustainability of the good chemical profit margin should be monitored. The futures - spot spread has reached a high level, and the market is in a low - level oscillation after initially pricing in the negative expectations [5]

Group 1 - OPEC+ announced a two-year oil strategy and a significant production increase of 547,000 barrels per day, reversing previous production cuts ahead of schedule [1] - The decision to increase production aims to regain market share, but the timeline for restoring the suspended 1.66 million barrels per day remains unclear, potentially extending to the end of 2026 [1] - Future OPEC+ meetings will assess market conditions to determine whether to continue increasing supply or to pause or reverse recent production increases [1] Group 2 - Analysts suggest that OPEC+ may need to consider production cuts in the coming months due to a projected surplus of 2 million barrels per day in the global market in Q4, influenced by increased supply from the Americas [2] - Major financial institutions predict a decline in Brent crude oil prices, with estimates suggesting a drop to around $60 per barrel by year-end, which is below the breakeven point for many OPEC+ members [2] - Geopolitical factors complicate the situation, as the U.S. government increases diplomatic pressure on Russia, a key OPEC+ member, amid ongoing tensions related to the Ukraine conflict [2][3] Group 3 - The recent meeting between Russian and Saudi officials symbolizes unity between the two major oil-producing countries, highlighting the challenge OPEC+ faces in balancing price pressures and alliance cohesion [3] - The ongoing U.S. sanctions on Russian oil create additional complexities for OPEC+, as they navigate the need to protect market share while maintaining unity within the organization [3]