Core Viewpoint - The oil market is experiencing significant downward pressure due to increasing supply surplus, overshadowing geopolitical factors and leading to a decline in oil prices, with Brent crude falling below $60 for the first time in seven months [3][4][21]. Market Dynamics - Brent crude oil futures closed at $58.92, down 2.71%, while WTI crude oil futures closed at $55.27, down 2.73% [6][18]. - The American Petroleum Institute (API) reported a significant decrease in U.S. crude oil inventories by 9.322 million barrels for the week ending December 12, exceeding market expectations of a 2.197 million barrel drop, but this did not significantly impact market sentiment [3][4][16]. - The Energy Information Administration (EIA) revised its monthly report, indicating an average daily supply surplus of over 4 million barrels per day for the past two months, confirming the accumulation of crude oil inventories [4][16]. Geopolitical Factors - Geopolitical tensions, particularly regarding Venezuela, have not significantly influenced the market, as evidenced by the muted market reaction to the U.S. seizure of a Venezuelan oil tanker [5][19]. - The impact of geopolitical events is diminishing, with the market focusing more on supply-demand dynamics rather than geopolitical disruptions [5][17]. Supply and Demand Outlook - The market is expected to face concentrated supply surplus pressures in the fourth quarter, with OPEC+ and other regions increasing production, contributing to a bearish outlook for oil prices [4][21]. - Analysts predict that oil prices may continue to decline throughout the year due to the anticipated supply surplus and weak demand, with a 20% drop in benchmark oil prices observed this year [21][21].

Core Viewpoint - Oil prices continue to decline, with SC crude oil hitting a new low for the year and Brent crude falling below $60, indicating a bearish market outlook driven by geopolitical tensions and ongoing negotiations regarding the Russia-Ukraine conflict [4][17]. Market Dynamics - On Monday, WTI crude oil futures closed down by $0.62, a decrease of 1.08%, settling at $56.82 per barrel; Brent crude futures fell by $0.56, or 0.92%, to $60.56 per barrel; and INE crude futures dropped by 1.58% to 430.20 yuan [6][19]. - The market is closely monitoring the negotiations between Ukraine and U.S. representatives regarding the end of the Russia-Ukraine conflict, with reports indicating significant progress and preliminary consensus on key issues [4][20]. Geopolitical Factors - U.S. officials have stated that approximately 90% of the issues between Ukraine and Russia have been resolved, although the final 10% may prove to be the most challenging [5][18]. - Ukrainian President Zelensky acknowledged the effectiveness of the Berlin talks but noted differing positions on territorial issues between the U.S. and Ukraine [5][21]. Supply and Demand Insights - The Middle Eastern benchmark Murban crude's spot premium has continued to decline, reaching a two-week low due to ample supply and increased production prospects in the region [9][22]. - China's crude oil processing volume increased by 3.9% year-on-year in November, with new import quotas offsetting some of the impacts from refinery maintenance [9][23]. Future Outlook - The overall trend suggests a bearish sentiment for oil prices, with recommendations to consider short-selling opportunities during price rallies [5][18].

1. Report's Investment Rating for the Industry - No information provided 2. Core Viewpoints - Oil prices continue to face pressure, with WTI crude oil falling below the $60 mark, and Brent and China's SC crude oil futures closing lower in tandem The core pressure stems from oversupply, as US crude oil production hits a record high and commercial crude oil inventories increase significantly Although sanctions against Russia and OPEC+'s suspension of production increases alleviate some expectations, the supply - demand pattern remains unchanged [1] - In the short term, oil prices will fluctuate within a range, and the weakening of the monthly spreads of European and American crude oil indicates a lack of upward momentum There is still a risk of unexpected inventory accumulation [1] - In the long term, the global energy sector has entered the "energy accumulation" era, with fossil fuels and renewable energy developing in parallel, and oil demand will remain at a high level [1] - In the short term, it is recommended to maintain a short - selling mindset, seize opportunities to short on rallies, and guard against sudden risks such as geopolitical conflicts in Venezuela It is highly likely that the center of oil prices will decline this year [1] 3. Summary by Related Catalogs Trading Strategies - Unilateral: Trade within a range, with strong resistance at $65 for Brent and support at $60 [2] - Arbitrage: Try shorting the monthly spreads [2] - Options: Stay on the sidelines [2] Logic Combing Core Pressure - The EIA report shows that US commercial crude oil inventories increased by 5.202 million barrels, and domestic crude oil production reached a record high of 13.651 million barrels per day, with imports rising simultaneously, highlighting continuous supply pressure [7] - Although sanctions against Russia and OPEC+'s suspension of production increases in the first quarter of next year alleviate some expectations of oversupply, the market still maintains the core judgment of "oversupply" and only slightly revises up the target for falling oil prices [7] Short - term Trend - Oil prices are currently in a narrow - range fluctuation, and funds are waiting to see the changes in the supply - demand pattern after sanctions against Russia Clear guidance from inventory and physical markets is needed [8] - The weakening of the monthly spreads of European and American crude oil indicates a lack of upward momentum for oil prices If there is unexpected inventory accumulation, market confidence will be further dampened [8] Key Influencing Factors - Geopolitical risk: Guard against the impact of a possible war in Venezuela, which may disrupt oil prices in the short term [9] - Demand side: Global refined oil performs better than crude oil US gasoline inventories have dropped to the lowest level since November 2022, and the European market drives diesel demand [9] Related Information - Saudi Aramco sets the official selling price of Arab Light crude oil for December to Asia at a premium of $1 per barrel to the Oman/Dubai crude oil average price, to the US at a premium of $3.20 per barrel to the Argus Sour Crude Index, and to Northwest Europe at a premium of $1.35 per barrel to the Brent crude oil settlement price [10] - The US Energy Information Administration (EIA) reports that commercial crude oil inventories (excluding strategic reserves) increased by 5.202 million barrels to 421 million barrels, a 1.25% increase, compared with an expected increase of 0.603 million barrels and a previous decrease of 6.858 million barrels Cushing crude oil inventories in Oklahoma were 0.3 million barrels, compared with 1.334 million barrels in the previous week US Strategic Petroleum Reserve (SPR) inventories increased by 0.498 million barrels to 409.6 million barrels, a 0.12% increase, compared with 0.533 million barrels in the previous week EIA heating oil inventories decreased by 0.036 million barrels, compared with an increase of 0.049 million barrels in the previous week EIA refined oil inventories decreased by 0.643 million barrels, compared with an expected decrease of 1.969 million barrels and a previous decrease of 3.362 million barrels Gasoline inventories decreased by 4.729 million barrels, compared with an expected decrease of 1.14 million barrels and a previous decrease of 5.941 million barrels Gasoline inventories in the US Midwest last week dropped to the lowest level in history, and US gasoline inventories for the week ending October 31 dropped to the lowest level since November 2022 [10] Global Crude Oil Spot Price and Spread Changes | Variety | 2025 - 11 - 06 | 2025 - 11 - 05 | 2025 - 10 - 30 | Daily Change | Weekly Change | | --- | --- | --- | --- | --- | --- | | Brent Crude Oil M + 2 | 63.75 | 63.52 | 65 | 0.23 | - 1.25 | | WTI Crude Oil M + 2 | 59.66 | 59.42 | 60.2 | 0.24 | - 0.54 | | SC Crude Oil M + 2 | 460.1 | 463.4 | 461.3 | - 3.3 | - 1.2 | | Dubai Crude Oil M + 2 | 63.56 | 64.31 | 64.41 | - 0.75 | - 0.85 | | Oman Crude Oil M + 2 | 64.82 | 65.6 | 66.03 | - 0.78 | - 1.21 | | Murban Crude Oil M + 2 | 65.76 | 66.7 | 66.46 | - 0.94 | - 0.7 | | EFS Spread M + 2 | - 0.04 | 0.13 | 0.51 | - 0.17 | - 0.55 | | Brent Monthly Spread (M + 2 - M + 3) | 0.27 | 0.37 | 0.72 | - 0.1 | - 0.45 | | Oman Monthly Spread (M + 2 - M - 3) | 0.45 | 0.37 | 0.72 | 0.08 | - 0.27 | | Dubai Monthly Spread (M + 1 - M + 2) | 0.52 | 0.51 | 0.87 | 0.01 | - 0.35 | | SC Monthly Spread (M + 1 - M + 2) | - 1.3 | - 0.8 | 0.3 | - 0.5 | - 1.6 | | SC - Dubai (M + 2) | 0.2757 | 1.0802 | 0.7352 | - 0.8045 | - 0.4595 | | SC - Oman (M + 2) | - 0.9943 | - 0.2698 | - 1.7948 | - 0.7245 | 0.8005 | [12]