Report Industry Investment Rating - The report gives a "sideways" rating for liquefied petroleum gas [1] Core Viewpoints of the Report - The widening of the FEI - MB spread since August is mainly due to trade flow changes and cargo flow bottlenecks driving up transportation costs, and it is expected to weaken marginally after late August as the Panama congestion eases, but the space for reverse shorting is limited. If the Far - East arrival schedule is significantly delayed and the stocking demand in September is not fully met, FEI may remain relatively strong until October [2][4][13] - The CP contract price has been weak since July, and the low relative valuation in the next two months is expected to continue. The ongoing long - term contract negotiations in India, port congestion, and high freight rates suppressing FOB negotiations may continue to affect the price performance of the CP contract [3][4][30] Summary by Relevant Directory 1. FEI's Relative Valuation Strengthens, Trade Flow Changes and Cargo Flow Bottlenecks Drive up Transportation Costs - In July, both domestic and foreign LPG prices were weak, with the weakening absolute price, gas - oil ratio, and near - month spread reflecting weak market sentiment. The weak fundamentals of the LPG commodity and poor spot sentiment were the main negative factors. The supply - demand pattern of LPG in the second half of this year is expected to be looser than in the first half, weaker than previously expected [12] - In August, the near - month spread and relative valuation of FEI strengthened significantly, especially the sharp widening of the FEI - MB spread. The core reason is the increase in transportation costs caused by trade flow changes and cargo flow bottlenecks. The spread is expected to weaken marginally as the Panama congestion eases, but it is difficult to provide a good opportunity for reverse shorting [13] - Since April, affected by Sino - US tariff policies, LPG trade flows have changed significantly. The increase in long - distance trade volume has led to an increase in ton - mile transport demand and a relative tightening of available fleet capacity, causing freight rates to rise continuously since May. In August, the congestion of the Panama Canal was the core reason for the strengthening of the FEI/MB spread, but the spread is not expected to continue rising. The congestion is likely to improve significantly by the end of August at the latest [18][21][22] 2. Indian Long - Term Contract Negotiations and Seasonal Port Congestion May Continue to Suppress the Absolute Price of CP Contracts - Since July, the CP price has been continuously weak and its valuation is low. The CP official price, which had been relatively strong since the beginning of the year, reversed in July and continued to decline in August. In addition to the loosening of supply and demand, the long - term contract negotiations in India have also put additional pressure on the CP price. It is expected that the official price of CP in September may still be low [30][31] - India's demand has maintained a high growth rate this year, but port congestion during the summer may continue to affect the performance of the CP contract price. High freight rates suppressing FOB negotiations may also contribute to this. It is likely that the CP will increase the arrival premium without increasing the absolute price in the short term [32] 3. Summary and Investment Suggestions - The spread between FEI and MB is expected to weaken marginally after late August as the Panama congestion eases, but the space for reverse shorting is limited. If the Far - East arrival schedule is significantly delayed and the stocking demand in September is not fully met, FEI may remain relatively strong until October [37] - The low relative valuation of CP in the next two months is expected to continue. The long - term contract negotiations in India, port congestion, and high freight rates suppressing FOB negotiations may continue to affect the price performance of the CP contract, and it is likely that the CP will increase the arrival premium without increasing the absolute price in the short term [37]

Report Investment Rating - The report gives a "sideways" rating for crude oil [5] Core Viewpoints - In the short term, oil prices will be affected by the change in the US stance towards Russia, with an upward risk. The potential decline in Russian exports due to the US threat of imposing secondary tariffs on countries buying Russian oil has not been fully priced in. The short - term volatility of oil prices is expected to increase. In the medium to long term, the risk of supply glut remains high [3][21] Summary by Directory OPEC+ to Exit 2.2 million b/d Voluntary Cuts One Year Ahead - On August 3, 2025, OPEC+ decided to increase the production target by 547,000 b/d in September 2025. The eight countries will adjust the voluntary cut exit process flexibly according to market conditions. OPEC+ will exit the 2.2 million b/d voluntary cuts (and a 300,000 b/d production baseline increase for the UAE) one year ahead, with the September production target rising to around 36.3 million b/d [8] - OPEC+ actual production adjustment lags behind the increase in production targets, and the expectation of the peak demand season has supported the slight upward shift of the oil price fluctuation range since July [8] - In June 2025, OPEC+ total production was 34.69 million b/d, slightly lower than the agreement target. The production of 8 voluntary - cut countries increased by 394,000 b/d, with a slower - than - planned increase but a faster growth rate than the previous month. Iraq and Russia's production was still below the target, while Kazakhstan continued to over - produce, and Saudi Arabia's production was significantly higher than the target due to temporary measures [11] - After exiting the 2.2 million b/d voluntary cuts, there are still two layers of cuts to be exited. Saudi Arabia may accept lower oil prices for some time to pressure other members. After the seasonal demand weakens, the risk of inventory build - up is high, and the current baseline expectation is that OPEC+ may pause further production increases after the September increase [15] US Threatens to Increase Sanctions, Risk of Russian Export Disruptions Rises - US President Trump has pressured Russia to reach a cease - fire agreement with Ukraine by August 8, threatening to impose secondary tariffs on countries buying Russian oil. The EU has also announced the 18th round of sanctions against Russia [18] - The "secondary tariff" measure may lead to more complex tariff frictions between the US and China or India, and have a negative impact on the economy and oil demand. Indian refineries have increased crude oil purchases from non - Russian markets. If the tariffs are implemented, Russian exports may decline. However, the market is still skeptical about whether the US will severely crack down on Russian energy exports [19] Investment Advice - Since the third quarter, oil prices have been relatively strong. The supply glut risk is not prominent during the peak demand season, but the contradiction in the supply - demand fundamentals may emerge after the seasonal demand weakens. The US tariff policy may further suppress demand growth expectations, and the long - term risk of supply glut remains high [21]

1. Report Industry Investment Rating - The investment rating for the oil industry is "Oscillation" [1] 2. Core Viewpoints of the Report - OPEC+ decided to maintain a production increase plan of 411,000 barrels per day in July, with the current production policy mainly aiming to maintain market share. The accelerated production increase by OPEC+ has led to a risk of supply surplus, and the over - production situation in some member countries has not shown obvious improvement [2][3][24] - The demand in major markets is currently relatively stable, but the market's outlook for medium - and long - term demand remains cautious, and it is difficult to drive oil prices up in the short term. The increase in global on - land crude oil inventories since the second quarter is the main factor suppressing the upside space of oil prices [3][24] 3. Summary by Relevant Catalogs 3.1 OPEC+ Production Increase Plan in July - Eight member countries (Saudi Arabia, Iraq, the UAE, Kuwait, Algeria, Russia, Kazakhstan, and Oman) will increase production by 411,000 barrels per day in July. The gradually increasing production may be suspended or reversed according to market conditions. The eight countries also agreed to fully compensate for any excess production since January 2024 [10] - As of April, the total production of OPEC+减产 countries was 34 million barrels per day, basically in line with the upper limit of the total production target. The actual production of the eight voluntary - production - cut countries was 30.81 million barrels per day, with an increase lower than the planned increase [10] - In April, the eight voluntary - production - cut countries still exceeded the production limit by about 260,000 barrels per day. Kazakhstan was the main over - producing country, with a production of 1.82 million barrels per day in April, still exceeding the target by about 350,000 barrels per day [11] 3.2 Reasons for OPEC+ Production Increase and Member - Specific Situations - The main purpose of the eight core member countries to accelerate production increase is to maintain their market share. Saudi Arabia and the UAE have high idle production capacity and strict past production - cut implementation, with high potential for future production increase [2][13] - Kazakhstan's over - production has deteriorated this year. Its current production is close to the capacity limit, and future production increase space is limited. Due to the government's limited ability to intervene in the production of major oil fields, it is difficult for Kazakhstan to reach the OPEC+ agreed production target, which may threaten the stability of the alliance [14][16] 3.3 Supply Situations in Iran and Venezuela - Iran's supply is expected to remain stable in the short term. Although the US has upgraded sanctions on Iran's oil trade, it has not yet caused substantial damage to Iran's export volume. However, Iran's floating storage inventory has reached a one - year high, indicating a decline in turnover efficiency [18] - Venezuela's crude oil production and export volume have declined. After Chevron's withdrawal, the lack of investment and stable diluent supply will be the main factors hindering Venezuela from maintaining production [19] 3.4 Investment Suggestions - In the short term, geopolitical conflict risks have caused disturbances, but it is difficult to continuously boost oil prices. The demand during the peak season needs time to be observed, and the increase in global on - land crude oil inventories is suppressing the upside space of oil prices [3][24]