1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Oil prices are under long - term pressure from the narrative of large supply. As the Fed's internal differences increase, market concerns about the future employment market and economy remain, and the atmosphere in the crude oil market is still weak after the interest rate cut. Attention should be paid to the progress of the Russia - Ukraine peace talks and all factors that can affect Russian oil supply [8]. - The EIA data this week is bearish from a forward - looking perspective, mainly due to the poor performance of distillates (the main product in autumn and winter demand) and the fact that US refineries are gradually entering the autumn maintenance period [21]. - The three major energy institutions (IEA, OPEC, EIA) did not significantly adjust the demand side in their September reports, but IEA and EIA have significantly increased the supply forecast for three consecutive months, and EIA expects Brent crude oil prices to fall significantly in the next few months [22]. 3. Summary According to the Directory 3.1 Weekly Views - Last week's view: Crude oil is under long - term pressure from large supply. As supply increases and autumn maintenance deepens, the supply - demand imbalance will become more significant, and oil prices will be under pressure. Attention should be paid to the Fed meeting, and short - term interference factors are mainly from the Middle East geopolitical situation and potential sanctions against Russia [8]. - This week's price trend: Oil prices rose first and then fell. The rise was mainly due to Ukraine's attack on Russian energy facilities, but the latter half of the week saw a decline due to the bearish EIA weekly report and the Fed's interest rate cut [8]. - This week's main views: Fundamentally, the downward trend of the monthly spread has slowed slightly, and cracking is relatively resilient. The US is gradually entering the autumn maintenance period, and distillate demand is poor. The Fed cut interest rates by 25BP as expected, but internal differences increased. Trump said there would be good news soon, and attention should be paid to geopolitical developments [8]. 3.2 Weekly Key Points - **Global near - month spread**: The near - month spreads of Brent and WTI in the world's major markets slightly rebounded this week, but the long - term trend is still downward, indicating a slowdown in spot supply and demand [12]. - **Cracking trend**: Global refined oil spot prices are still supported. Relatively speaking, the cracking trend of US spot is slightly weaker, while that of Northwest Europe and Singapore is stronger. Although terminal demand is okay, the supply increase is greater, resulting in a weaker near - end spread [14][15]. - **Fundamental quantitative indicators**: The current comprehensive indicator of crude oil fundamentals is neutral, and the latest signal was negative from September 10th to 11th. The current forward - looking indicator of crude oil fundamentals is also neutral, and the latest signal was positive only on September 16th [18]. - **US autumn maintenance and distillate performance**: As of September 12th, the US refinery operating rate decreased by 1.6% to 93.3% month - on - month, indicating the start of the traditional autumn maintenance. Distillate demand decreased instead of increasing during the traditional autumn harvest season, and inventory increased during the period of declining refinery operating rate, which is contrary to the seasonal trend [21]. - **Summary of September report views of major energy institutions**: The three institutions did not significantly adjust the demand side, but IEA and EIA increased the supply forecast. EIA expects Brent crude oil prices to fall significantly in the next few months [22]. - **Fed's September meeting**: The Fed cut interest rates by 25BP to 4% - 4.25% in September, in line with market expectations. The dot - plot in September showed that the doves gradually dominated. There are obvious contradictions in this meeting, highlighting internal differences within the Fed [23][26]. - **Russia - Ukraine situation**: The Russia - Ukraine peace talks have stagnated, but there may be a turning point. Trump said a cease - fire agreement may be near. Ukraine's increased attacks on Russian energy facilities led to a short - term rise in oil prices [27]. - **North American hurricane forecast**: According to NOAA, the probability of this year's hurricane activity exceeding the normal level is 60%, but it is relatively calm compared to last year. Currently, there are no hurricanes in the Gulf of Mexico, and no potential cyclones are expected to form in the key areas of the Gulf of Mexico in the next 7 days [29]. 3.3 Price, Spread, Cracking - **Crude oil futures and spot trends**: Various charts show the trends of crude oil futures and spot prices, including different types of crude oil and related indicators such as net long positions in futures and options [32][34][37]. - **Crude oil futures structure and spreads**: Charts display the structure of crude oil futures (such as the prices of different contract months) and various spreads (monthly spreads, cross - market futures spreads, cross - market spot spreads, etc.) [40][43][46]. - **Saudi OSP**: Saudi Arabia adjusted its official selling prices (OSP) for different regions and different grades of crude oil in October compared to September [56]. - **Refined product prices and cracking**: Charts show the prices and cracking spreads of refined product futures and spot in different regions (US, Europe, Asia, etc.) [61][63][66]. 3.4 Supply - Demand Inventory Balance Sheet - **Global crude oil supply**: It includes the supply of OPEC, non - OPEC, and the total global supply. Data shows the historical and predicted values of these supplies [82]. - **Non - OPEC and OPEC supply details**: Details of non - OPEC supply from countries like the US, the former Soviet Union, China, and Brazil, as well as OPEC supply (including production, capacity, and supply from major countries and exempt countries) are presented [85][88][91]. - **Global rig count**: Information on the number of rigs in the US, Canada, and globally, as well as the number of US oil rigs and related production indicators [97][99]. - **Refinery unit shutdown volume**: Data on the shutdown volume of CDU and FCC units globally, in the US, Northwest Europe, and Asia [102][104]. - **Global crude oil demand**: It includes the demand of OECD and non - OECD regions and the total global demand, with historical and predicted values [106]. - **Inventory data**: Inventory data for the US, OECD, and other regions (such as Europe, Japan, ARA, Singapore, and China) are provided [114][117][119]. - **EIA balance sheet**: The EIA balance sheet shows the supply, consumption, balance, and balance changes of global crude oil from 2025 to 2026 [134]. 3.5 EIA Weekly Report and Others - **EIA weekly report main data**: It includes data on crude oil production, commercial crude oil inventory, refinery operating rate, and total crude oil chain inventory [149]. - **Supply data**: Data on the production of crude oil, gasoline, distillates, jet fuel, residual fuel oil, propane - propylene, and their yields are presented [152][155].

Core Viewpoint - The Federal Reserve's interest rate decision in September is expected to show significant internal divisions among its members [1] Group 1: Dovish Members - Dovish members such as Waller, Bowman, Daly, and the likely confirmed nominee Milan may advocate for further rate cuts [1] Group 2: Hawkish Members - Hawkish members including Harmack, Bostic, Musalim, and Schmidt emphasize the risks associated with inflation [1] Group 3: Potential Outcomes - Even if a 25 basis point rate cut occurs in the September meeting, there may still be dissenting votes within the committee [1]

Core Viewpoint - The article discusses the challenges faced by the Federal Reserve, particularly the pressure from President Trump and dissent within the Federal Open Market Committee (FOMC) regarding interest rate decisions [1][2][3]. Group 1: Federal Reserve's Internal Dynamics - Dudley highlights that the dissent during the recent FOMC meeting is a significant event, marking the first time since 1993 that multiple members opposed a decision to maintain interest rates [1]. - The dissenting votes from two Trump-appointed members, Bowman and Waller, are seen as an exaggeration of internal divisions within the Fed [3][4]. - Dudley emphasizes that the influence of President Trump over Powell is limited, as the Supreme Court has ruled that the Fed Chair can only be removed for "just cause," which does not include the issues raised by Trump [2][3]. Group 2: Future of Federal Reserve Leadership - Even if Trump appoints Powell's successor, Dudley argues that the new chair may not fully comply with presidential demands, especially if they conflict with the Fed's statutory mission [3]. - Dudley suggests that it would be surprising if Trump could appoint more than two or three FOMC members during his current term, limiting his control over the committee [3][4]. Group 3: Public Perception and Credibility - Dudley asserts that the recent criticisms of Powell and the Fed's policies are overstated, particularly regarding the Fed's role in addressing climate change, which he believes falls within its core financial stability functions [5]. - He argues that the Fed's efforts during the 2008 financial crisis and the COVID-19 pandemic to stabilize markets should be praised rather than criticized, reinforcing the importance of the Fed's independence [6].

Core Viewpoint - The article discusses the internal disagreements within the Federal Reserve, particularly regarding the recent dissent from two board members against maintaining interest rates, suggesting that these disagreements are exaggerated and do not significantly undermine Powell's authority [1][3][4]. Group 1: Federal Reserve's Internal Dynamics - Dudley highlights that the dissent from board members Waller and Bowman is a rare occurrence, marking the first time since 1993 that multiple members have opposed a decision [3]. - The article emphasizes that Trump's influence over Powell is limited, as the Supreme Court has ruled that the Fed Chair can only be removed for "just cause," which does not include the issues raised by Trump [4][5]. - Dudley argues that even if Trump appoints Powell's successor, that individual may not necessarily follow Trump's directives, especially if they conflict with the Fed's statutory mission [5][6]. Group 2: Implications of Recent Dissent - The dissent from Waller and Bowman is viewed as a coincidence, as both are Trump appointees, and their opposition does not damage Powell's credibility [6][7]. - Dudley notes that typically, FOMC members do not publicly oppose the Chair unless there is a significant disagreement on policy direction, which was not the case in this instance [6][7]. - The article concludes that the Fed's efforts during the 2008 financial crisis and the COVID-19 pandemic, as well as its recent success in lowering inflation without triggering a recession, should be recognized rather than criticized [7].

Core Viewpoint - The internal divisions within the Federal Reserve have been exaggerated, and the recent actions of two board members do not undermine Chairman Powell's position [1] Summary by Relevant Sections Federal Reserve Leadership - Dudley suggests that Waller's call for interest rate cuts is motivated by his ambition to succeed Powell as Chairman, while Bowman is acting in her supervisory capacity as Vice Chair [1] Critique of Monetary Policy - Dudley has expressed criticism of the Federal Reserve's monetary policy framework established in 2020, highlighting flaws and the inadequate consideration of the costs and benefits of quantitative easing [1] Defense of Powell's Position - Despite his criticisms, Dudley believes that the attacks on potential successors to Powell are somewhat excessive [1]

Core Viewpoint - The internal divisions within the Federal Reserve have been exaggerated, and recent actions by two board members do not undermine Chairman Powell's position [1] Group 1 - Dudley suggests that Waller's call for interest rate cuts is motivated by his ambition to succeed Powell as Chairman, while Bowman is acting in her supervisory capacity as Vice Chair [1] - Dudley acknowledges his criticisms of the Federal Reserve, including flaws in the 2020 monetary policy framework and the inadequate consideration of the costs and benefits of quantitative easing [1] - Despite his criticisms, Dudley believes that the attacks on potential successors to Powell are somewhat excessive [1]

Core Viewpoint - The Federal Reserve has decided to pause interest rate cuts as expected by the market [1][10]. Group 1: Federal Reserve's Decision - The FOMC members, including Powell, supported maintaining the current interest rates, while Waller and Bowman advocated for a 25 basis point cut [2][9]. - The statement removed the phrase indicating that economic uncertainty had diminished and reiterated that uncertainty remains high, changing the description of economic growth from "steady expansion" to "moderate growth in the first half of the year" [3][18][20]. - The decision to pause interest rates marks the fifth consecutive meeting without action, following three rate cuts totaling 100 basis points since last September [10][22]. Group 2: Internal Disagreements - This meeting revealed the largest internal disagreement among Fed officials since the rate cut cycle began, with two officials voting against the decision to maintain rates [4][15]. - The dissenting votes from Waller and Bowman highlight a fracture in consensus regarding the impact of tariffs on the economy [4][17]. - Economists view the statement as more dovish than expected, increasing the likelihood of a rate cut in September [5][12]. Group 3: Economic Outlook - The Fed's statement emphasized that economic uncertainty remains high and noted a slowdown in economic growth during the first half of the year [18][20]. - The labor market appears robust, but inflation remains above target, which traders interpreted as unfavorable for immediate rate cuts [13][24]. - The Fed plans to continue reducing its holdings of U.S. Treasuries and mortgage-backed securities, with a slower pace of balance sheet reduction [21][22].

Core Viewpoint - The Federal Reserve decided to maintain the federal funds rate target range at 4.25% to 4.50%, marking the fifth consecutive time since early 2025 that rates have been held steady, despite increasing pressure from the White House for rate cuts [1][3]. Group 1: Federal Reserve's Decision - The Federal Reserve noted a slowdown in U.S. economic growth in the first half of the year, which could provide a basis for future rate cuts if the trend continues [3]. - The Fed emphasized high uncertainty in the economic outlook, with risks to both inflation and employment targets [3]. - Two Fed governors voted against the decision to maintain rates, indicating deepening internal divisions regarding monetary policy [1][7]. Group 2: Economic Indicators and Influences - Fed Chairman Jerome Powell stated that the current monetary policy stance allows the Fed to respond promptly to potential economic developments, with future adjustments depending on comprehensive evidence, including employment, inflation, and economic activity data [3][5]. - Powell highlighted that tariffs have raised prices on certain goods, suggesting that 30% to 40% of core inflation may be influenced by tariffs, which could be a key factor in delaying rate cuts [5]. Group 3: Political Pressure and Internal Disagreements - President Trump has publicly pressured the Fed for significant rate cuts, even threatening to dismiss Powell, which reflects a tense relationship between the Fed and the White House [6][11]. - The dissenting votes from the two governors, both appointed by Trump, align with concerns over a weakening labor market and the potential for increased recession risks if rates are not lowered [7][11]. Group 4: Market Reactions and Future Expectations - Following the Fed's decision, market expectations for a rate cut in September significantly decreased, with the probability of a 25 basis point cut dropping from 68% to 45% [12]. - Despite the drop in rate cut expectations, the U.S. stock market showed resilience, with mixed performance among major indices, indicating that investor sentiment remains cautious yet stable [14].

Core Viewpoint - The article discusses the increasing internal divisions within the Federal Reserve regarding potential interest rate cuts, particularly whether Jerome Powell will hint at a rate cut in September [1] Group 1: Federal Reserve's Internal Divisions - There is a growing split among Federal Reserve officials about the future direction of monetary policy [1] - Some members advocate for a cautious approach, while others push for immediate action to address economic concerns [1] Group 2: Interest Rate Speculation - Market speculation is rising about the possibility of a rate cut in September, influenced by recent economic data [1] - Analysts are closely monitoring Powell's upcoming statements for any indications of a shift in policy [1]

Core Viewpoint - The recent Federal Reserve meeting witnessed a dramatic split with two dissenting votes from Bowman and Waller, causing significant turmoil in global financial markets as they opposed the anticipated interest rate cuts [1] Group 1: Key Players and Their Positions - Bowman, representing the aggressive rate hike faction, advocates for an immediate 50 basis point increase to combat persistent inflation, particularly in housing and services, which have seen year-on-year increases exceeding 6% [2] - Waller, leading the hawkish faction, supports pausing rate hikes but insists on removing any language suggesting potential rate cuts, thereby shattering market expectations for easing [2] - Powell and the majority of committee members represent the status quo, opting for a compromise by pausing rate hikes while keeping the option open for future increases, hinting that rate cuts will depend on sustained declines in inflation [2] Group 2: Market Reactions - Following the dissenting votes, the US dollar index surged by 1.5%, reaching a three-month high, indicating that internal divisions within the Fed lead to a stronger dollar as a safe haven [3] - Gold prices plummeted by $40, falling below the $1900 mark, reflecting the market's reaction to heightened expectations of aggressive rate hikes [3] - The 2-year Treasury yield rose by 22 basis points, signaling that the bond market anticipates continued monetary tightening [4] Group 3: Investment Strategies and Signals - Investors are advised to closely monitor the "Bowman Indicator," specifically the US services CPI, as a reading above 5% for three consecutive months could trigger renewed fears of rate hikes [5] - Understanding Waller's rhetoric is crucial; phrases like "data-dependent" may indicate readiness for rate hikes, while "cautious approach" suggests no rate cuts are forthcoming [6] - A suggested investment strategy includes a portfolio allocation of 70% in cash, 15% in energy stocks, and 15% in volatility hedging tools to navigate the current market uncertainty [6] Group 4: Potential Risks and Future Outlook - The looming risk of a technical default arises if the debt ceiling is not resolved before October, compounded by Bowman and Waller's resistance to easing [6] - The commercial real estate sector faces significant challenges with record vacancy rates and high-interest rates potentially leading to loan defaults, which could trigger a regional banking crisis [6] - A sudden OPEC+ production cut could reignite inflation, bolstering support for the Bowman faction and forcing the Fed to make difficult decisions that could impact the stock market [6]