Summary of Key Points from the Conference Call Industry Overview - **Industry**: Oil and Gas Sector in China - **Focus**: Opportunities in deep-sea exploration and oil price recovery Core Insights 1. **Deep-Sea Exploration Growth**: The acceleration in the deep-sea exploration permitting framework in the US has attracted investor interest in deep-sea mining and oil & gas exploration. Notably, order intake for FPSOs has significantly increased, driven by deepwater and ultra-deepwater oilfield exploration in South America and Africa [2][2] 2. **Guyana's Oilfields**: The Stabroek oilfield in Guyana, developed by ExxonMobil (45%), Chevron (30%), and CNOOC (25%), is highlighted as a key area of growth. Four additional projects are under construction, with expected production ramp-ups leading to higher returns by 2030 [2][2] 3. **Oil Price Forecasts**: UBS has revised its oil price forecasts, lowering the 2026 estimate to US$62/bbl due to anticipated oversupply of 1.9Mb/d. However, a gradual recovery is expected as supply and demand improve [3][3] 4. **Impact of US Sanctions on Venezuela**: If US sanctions on Venezuela are lifted, production could recover to 1Mb/d, potentially increasing to 1.2-1.3Mb/d. This could exert additional pressure on the oil market in 2026, but the overall supply-demand dynamics are not expected to change significantly [4][4] Company-Specific Insights 1. **PetroChina and CNOOC Price Target Adjustments**: - PetroChina's price target raised to Rmb14.0/HK$11.5 from Rmb12.9/HK$10.3, reflecting a re-rating of the oil and chemical sector [5][5] - CNOOC's price target increased to HK$30.0 from HK$26.5, based on a higher EV/EBITDA multiple [5][5] 2. **Valuation Comparisons**: China's oil majors are trading at lower valuation multiples compared to their overseas peers, with an average 2026E PE/PBV of 11/1.0x versus 13/1.6x for global counterparts. This suggests potential upside for Chinese oil companies [5][5] Additional Insights 1. **Dividend Yield**: The average dividend yield for A+H shares of China's oil majors is projected at 5.2%, which is above the overseas peer average of 4.8% [5][5] 2. **Market Dynamics**: Teapot refineries in China, which typically import Venezuelan crude, may shift to cheaper alternatives like Russian crude, indicating a limited impact from potential Venezuelan oil supply increases [4][4] Conclusion - The oil and gas sector in China is poised for growth, particularly in deep-sea exploration, with favorable long-term price recovery expectations. Companies like PetroChina and CNOOC are well-positioned to benefit from these trends, despite short-term challenges related to oil supply dynamics and geopolitical factors.

Summary of Global Oil Market Conference Call Industry Overview - The conference call discusses the global oil market, focusing on supply and demand dynamics, price forecasts, and geopolitical risks affecting oil production and pricing. Key Points Oil Price Trends - Oil prices have fluctuated within a $7/bbl range, with Brent rebounding to the mid-$60s due to geopolitical risks, particularly concerning Iran and disruptions in Kazakhstan [2][9] - The market is expected to remain in a large surplus, with Brent prices projected to stay low in the near term [9][10] Supply and Demand Forecasts - The global oil market is projected to have a surplus of over 2Mb/d in 2026, with the IEA forecasting a surplus of 3.7Mb/d and the EIA at 2.8Mb/d [3][22] - Demand growth forecasts for 2026 vary: UBS estimates 1.4Mb/d, while the EIA revised down to 1.1Mb/d, and OPEC remains unchanged at 1.4Mb/d [29][33] - Non-OPEC+ supply growth is expected to slow, with UBS raising its forecast to 0.7Mb/d for 2026, primarily driven by the US [37][66] Geopolitical Risks - Kazakhstan's oil output has been affected by disruptions, with potential outages reaching up to 1Mb/d due to issues at the Tengiz and Korolev oilfields [60][65] - OPEC+ compliance remains a concern, with the potential for supply disruptions in Russia and other member countries impacting overall production [10][11][65] Price Scenarios - Upside scenarios for oil prices could arise from supply disruptions, particularly in Russia, potentially pushing Brent prices closer to $70/bbl [10] - Downside risks include resolutions to current supply disruptions, which could lower prices below $60/bbl, especially if a recession occurs [11] Production Adjustments - OPEC+ output in December decreased by 40kb/d, with significant reductions from Kazakhstan, Saudi Arabia, and Iraq, despite a rebound in Russian output [5][92] - The unwinding of OPEC+ voluntary cuts is expected to resume in April 2026, with a planned increase of 137kb/d per month [97] Long-term Outlook - The long-term outlook suggests that oil demand may peak around 2030, with a plateau expected rather than a sharp decline thereafter [69] - The impact of electric vehicles (EVs) is anticipated to gradually reduce gasoline demand, with a significant shift expected by 2030 [75] Conclusion - The global oil market is characterized by a significant surplus, mixed demand forecasts, and geopolitical uncertainties that could influence both supply and pricing dynamics in the near to medium term [60][62]

Summary of Oil Monitor Conference Call Industry Overview - The report focuses on the oil industry, specifically analyzing the factors influencing oil prices despite a perceived global oversupply and increased production from Kazakhstan and the US [1][2]. Key Points and Arguments 1. **Oil Price Stability**: Oil prices are currently higher than expected, with Brent trading around $68/bbl, contrary to expectations of a drop to ~$50/bbl due to a 2-mb/d oversupply [1]. 2. **Price Influencing Factors**: Several factors contribute to the elevated prices: - Production outages in Kazakhstan - Severe cold weather in the US - Geopolitical tensions in the Middle East - Tightening US restrictions on Russian oil purchases [1]. 3. **Future Price Predictions**: - Prices may moderate as US weather improves and Kazakhstan's Tengiz field resumes production. - However, further geopolitical tensions could push prices to a target of $70/bbl in the short term [1][7]. 4. **US Oil Inventory Trends**: - US crude stockpiles have decreased, while refined product inventories have increased, influenced by cold weather and refinery activity disruptions [2][20]. - The US recorded a commercial crude oil inventory drop of 2.3 million barrels to 423.8 million barrels, which is 8.6 million barrels higher than the same period last year [20][28]. 5. **Kazakhstan Production Update**: - The Tengiz oil field, which was offline due to a fire, is expected to resume production soon, which should alleviate some price pressures [5]. 6. **Geopolitical Risks**: - Increased military presence in the Middle East has raised the geopolitical premium on oil prices by $3 to $4/bbl, with potential for further escalation [7]. 7. **Chinese Demand**: - China's strong oil imports, averaging 12.8 mb/d in November and December 2025, have contributed to price strength, despite a modest macroeconomic environment [14][16]. 8. **OPEC+ Production Decisions**: - OPEC+ has extended its production pause, maintaining its previous guidance for no unwinds in the first quarter of 2026, which could impact supply dynamics [19]. Additional Important Information - **US Oil Production Impact**: Cold weather has caused freeze-offs, temporarily reducing US oil production by approximately 1.5 mb/d [6]. - **Global Oil Inventory Changes**: Global commercial oil product inventories rose by 0.5 million barrels, indicating a mixed inventory situation across key trading hubs [23]. - **Market Dynamics**: The Brent-Dubai spread indicates a stronger Brent market, but there are signs of a contango in Dubai, suggesting potential shifts in purchasing patterns, particularly from China [19]. This summary encapsulates the critical insights from the conference call, highlighting the complexities of the oil market and the interplay of various factors affecting prices and inventory levels.

Summary of Key Points from the Conference Call Industry Overview - The focus is on the upcoming 4Q25 earnings season for Europe's Big Oils, starting with Equinor on February 4th, 2026, and the guidance for 2026 is expected to be a key topic [1][9] - The preference ranking for investment is Oil Services > Big Oils > Exploration & Production (E&Ps), with TotalEnergies (TTE) highlighted as the top pick among Big Oils [1] Core Insights and Arguments - The $60/bbl Brent price assumption is challenging for Europe's Big Oils, leading to a projected decline in refining margins by 35% compared to 4Q25 [2] - Capital expenditure (capex) budgets are expected to remain flat, with an average buyback cut of approximately 25% across the sector, except for TTE [2] - TTE and Galp are noted for their organically falling breakeven Brent prices, with TTE's Integrated Power business transitioning from a drag to a contributor to free cash flow (FCF) [3][11] - TTE's recent trading update has positively influenced consensus estimates, contrasting with downgrades from peers like BP and Shell [4] Financial Projections - The aggregate organic cash flow from major companies is projected to show a $16 billion deficit post distributions, which decreases to approximately $5.5 billion after accounting for inorganic cash flows [13] - TTE is expected to have the lowest organic breakeven price in the peer group at around $60/bbl for 2026, with projections of it dropping below $55/bbl by 2027 [14][16] - TTE's capex is anticipated to decline by over 10% year-on-year in 2026, with a significant reduction expected by 2028 [17][20] Balance Sheet and Debt Analysis - The analysis indicates that all Big Oils will reduce shareholder distributions in 2026 compared to 2025, with Equinor expected to see the most significant declines [22] - BP is projected to maintain the highest gearing in the peer group at around 40%, while TTE and Galp are expected to decrease their net debt year-on-year [31][36] Market Sentiment and Consensus - The consensus estimates for 4Q25 earnings have been revised down by 8% year-to-date, with TTE showing a rare positive update that has led to flat revisions compared to an average 8% downgrade across peers [49] - The overall sentiment indicates a cautious outlook for cash flows, with aggregate payouts expected to exceed 140% of organic FCF at the $60/bbl Brent price [10] Upcoming Catalysts - Key upcoming earnings reports include Galp and Equinor on February 4th, followed by several other companies throughout February [62] Additional Insights - The report emphasizes the importance of cash flow cushions and balance sheet strength, particularly for TTE and Equinor, as they navigate the challenging oil price environment [10][11] - The analysis suggests that the market may have already priced in the expected cuts to buybacks, indicating a potential for volatility in stock performance as earnings reports are released [65] This summary encapsulates the critical insights and projections regarding the oil industry and specific companies, particularly focusing on TotalEnergies and its competitive positioning within the sector.

Summary of Key Points from the Oil Market Forecasts Industry Overview - The report summarizes oil market forecasts from the IEA (International Energy Agency), EIA (U.S. Energy Information Administration), and OPEC (Organization of the Petroleum Exporting Countries) for 2026, highlighting demand and supply dynamics in the oil industry [2][4]. Core Insights Demand Growth Estimates - **2025 Demand Growth**: - IEA and EIA both revised global demand growth estimates upwards by 20 kb/d, now forecasting +0.85 mb/d and +1.16 mb/d respectively [5]. - IEA's revision includes a +60 kb/d increase in China demand, offset by downgrades in OECD Europe and Russia [5]. - OPEC maintained its estimate at +1.3 mb/d [5]. - **2026 Demand Growth**: - IEA upgraded its demand growth forecast by +60 kb/d to +0.93 mb/d, while EIA reduced its forecast by -100 kb/d to +1.13 mb/d [6]. - The IEA's upward revision is attributed to OECD Europe, while EIA's downgrade reflects weaker demand in Europe and China, partially offset by increases in India and Africa [6]. - OPEC's forecast remains unchanged at +1.38 mb/d for 2026 and introduces a 2027 estimate of +1.34 mb/d [6]. Supply Dynamics - **Non-OPEC Supply Growth**: - IEA revised its 2025 non-OPEC supply growth estimate upwards by +70 kb/d to +1.73 mb/d, driven by increases in Russian, U.S., and Canadian output [13]. - EIA's estimate for 2025 remains flat at +1.19 mb/d, with minor adjustments due to declining output from Kazakhstan [13]. - **2026 Non-OPEC Supply Growth**: - Both IEA and EIA now forecast +1.2 mb/d growth for 2026, with IEA making a -30 kb/d downward revision due to reduced Kazakh supply [14]. - IEA's forecast includes a +40 kb/d increase in Brazilian output, while EIA raised its growth forecast by +60 kb/d, primarily from U.S. liquids [14]. OPEC Production Insights - OPEC-12 output rose by ~105 kb/d in December, led by Iraq, Saudi Arabia, and Libya, but offset by a decline from Venezuela due to U.S. sanctions [16]. - The IEA reported a -340 kb/d decline in OPEC-12 production for December, contrasting with secondary sources [20]. - OPEC's 2025 crude production forecast was lowered by 70 kb/d to 28.4 mb/d, primarily due to a downgrade in Saudi production [21]. Market Surplus Projections - IEA projects a surplus of 3.7 mb/d for 2026, slightly down from previous estimates, driven by demand upgrades from OECD regions [23]. - EIA's surplus estimate increased from 2.3 mb/d to 2.8 mb/d, reflecting weaker demand in Europe and China [25]. - The convergence of IEA and EIA forecasts marks the closest agreement since July 2025, although discrepancies remain regarding OPEC production growth [26]. Additional Important Insights - The report indicates that the IEA's estimate for the 2026 market surplus has stabilized, with demand forecasts gradually increasing and OPEC production estimates leveling off [27]. - The overall outlook suggests a significant oversupply in the oil market for 2026, with both agencies highlighting the need for careful monitoring of demand and supply dynamics moving forward [23][24].

Citi Research January 20, 2026 GCC Navigating Growth Amid Oil Oversupply and Geopolitical Uncertainty Ilker DomacAC Economist ilker.domac@citi.com +971-4509-9588 Gultekin IsiklarAC Economist gultekin.isiklar@citi.com +90-212-319-4915 See AppendixA-1 for AnalystCertification, Important Disclosures and ResearchAnalystAffiliations Citi Research is a division of Citigroup Global Markets Inc. (the "Firm"), which does and seeks to do business with companies covered in its research reports. As a result, investors ...

ab 21 January 2026 The IEA slightly increased its projections for global oil demand growth, by 12kb/d in 2025 to 0.9Mb/d (UBSe +0.9Mb/d) and by 70kb/d in 2026 to 0.9Mb/d (UBSe +1.2Mb/ d). Absolute demand revisions rose by 130kb/d for 2025 and 200kb/d for 2026, driven by an upward revision to the base (+114kb/d for 2024). China's demand growth forecast was raised by 60kb/d for 2025, but reduced by 15kb/d to 180kb/d for both years. Non-OPEC+ growth also up Global Research First Read Global Oil Fundamentals La ...

Summary of the Conference Call on Oil & Gas Industry Industry Overview - The conference call focused on the **Asia-Pacific Oil & Gas** industry, particularly discussing oil inventories and geopolitical factors affecting the market [1][7]. Key Points and Arguments 1. **OECD Inventories**: - OECD commercial inventories increased by **7 million barrels (MMbls)** in November, reaching **2,838 MMbls**, which provides a **60 days demand cover** [2][37]. - A net draw of **23 MMbls** was observed in 4Q, contrasting with IEA's estimates of a **2.7 MMbls/d** oversupply [2]. 2. **Global Inventory Trends**: - Global inventories rose by **66 MMbls month-over-month**, totaling **6,449 MMbls** in November, with non-OECD inventories contributing significantly [3]. - China’s inventories increased by **3 MMbls** in November, indicating ongoing stockpiling [3]. 3. **Supply and Demand Forecast**: - Global oil demand is projected to grow by nearly **1.0 MMbls/d** to **105 MMbls/d**, with non-OECD Asia being the largest contributor [4]. - Non-OPEC supply growth is expected to outpace demand growth, leading to continued inventory builds through **2026** [4][7]. 4. **OPEC Production Dynamics**: - Despite increased OPEC supply, the call on OPEC crude is anticipated to decline to **25.8 MMbls** in 2026, suggesting a need for production cuts rather than increases [5]. - The unwinding of OPEC production cuts is expected to exacerbate market oversupply, particularly in the first half of the year [5]. 5. **Investment Implications**: - The IEA report indicates an oversupplied oil market, with non-OPEC supply growth outpacing demand, leading to significant inventory gains [7]. - The risk-reward scenario for investors is shifting favorably as oil prices are currently below the marginal cost of **$70/bbl**, suggesting potential for price recovery [7]. 6. **Valuation Comparisons**: - A comparison of major oil companies shows varying P/E ratios, with PetroChina at **8.8**, Sinopec at **11.4**, and CNOOC at **7.2** for 2026 metrics [8]. Additional Important Insights - **Geopolitical Risks**: The potential for geopolitical disruptions, particularly involving Venezuela, Iran, and Russia, could impact supply dynamics unexpectedly [7]. - **Long-term Price Outlook**: Oil prices are expected to average just below **$65/bbl** in 2026 based on inventory forecasts, indicating a challenging environment for producers [25]. This summary encapsulates the critical insights from the conference call, highlighting the current state and future outlook of the oil and gas industry, particularly in the Asia-Pacific region.

Summary of Key Points from Conference Call Records Industry Overview - **Industry Focus**: Energy, Utilities & Mining, specifically discussing sectors such as Oil, Gas, Nuclear, Power, and Steel [1] Key Insights and Arguments E&P (Exploration and Production) - **Natural Gas Volatility**: Recent cold weather has led to a sharp increase in natural gas prices, with investors balancing global supply risks against strong long-term US demand [1] - **Investor Sentiment**: While bullish on natural gas prices for most of 2025, investors have recently become cautious due to potential global supply risks by 2028 and warmer winter forecasts [1] - **Storage Levels**: Increased heating degree days (HDDs) from colder weather are expected to draw down storage levels more than previously anticipated, positively impacting natural gas producers [1] - **Valuation**: Companies like EXE and EQT are highlighted for their compelling risk-reward profiles, with expected price targets showing 19% and 20% upside respectively [1] Majors & Refiners - **Economic Outlook**: GDP expectations have surprised positively, positioning large-cap refining stocks favorably for potential economic reacceleration [2][4] - **Refining Performance**: Refining equities outperformed the XLE index significantly in 2025, driven by supply disruptions and increased global demand [4] - **Stock Recommendations**: Valero Energy (VLO) and HF Sinclair (DINO) are recommended due to their strong operational positions and expected capital returns [4] Midstream - **LNG Market Sentiment**: Cheniere (LNG) has seen a modest rebound, but investor focus remains on growth plans and global gas margin exposure [5] - **Growth Catalysts**: Cheniere is expected to execute additional brownfield expansions and deliver significant shareholder returns, with a contracted footprint mitigating global gas price fluctuations [5] Utilities - **Affordability Concerns**: Rising utility bills (up 17% over three years) have become a major focus, particularly in the PJM region, with upcoming elections potentially impacting utility policies [6][7] - **Investor Strategy**: Investors are screening for utilities with lower rates and diversified operations to mitigate election-related risks [7] Energy Services - **International Recovery**: Signs of recovery in international markets are noted, with increased activity expected in regions like the Middle East and Latin America [8] - **Stock Recommendations**: SLB and HAL are highlighted as best positioned to benefit from this recovery [8] Clean Technology - **Nuclear Investment**: CCJ is recommended as a key player in the nuclear sector, with potential upside from new reactor deployments and supportive uranium market dynamics [9][11] - **Valuation Risks**: Despite high valuations, positive catalysts are expected to support growth in the medium term [11] Metals & Mining - **Steel Pricing**: HRC prices have firmed up significantly, driven by favorable trade policies and steady demand from key markets [12][45] - **Stock Preference**: CMC is preferred due to its competitive valuation and strong market position in rebar production [12] Additional Important Insights - **Investor Conversations**: Ongoing discussions with investors highlight concerns about the macroeconomic environment, commodity price volatility, and specific company strategies [27][28][30][31] - **Regulatory Environment**: Changes in utility regulations and potential impacts from state elections are creating uncertainty in the utilities sector [36][37] This summary encapsulates the key points discussed in the conference call records, providing a comprehensive overview of the current state and outlook of various sectors within the energy and utilities landscape.

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the oil industry, particularly the disruptions in Kazakhstan's oil production and the implications for global oil prices and stock levels [1][5][11]. Core Insights and Arguments - **Crude Prices Stability**: Crude prices have remained stable as attention shifted from Iranian supply risks to disruptions in Kazakhstan production and CPC pipeline flows [1]. - **CPC Pipeline Exports**: Oil flows via the CPC pipeline have decreased significantly, dropping below 0.7 million barrels per day (mb/d), the lowest level in over nine years. Month-to-date average CPC exports are nearly 1 mb/d lower than the initial loading program due to delays in mooring repairs and production halts in Kazakhstan [1][3]. - **Kazakhstan Production Disruption**: An estimated disruption of 0.5 mb/d in Kazakhstan's January production is noted, which is 0.3 mb/d below the baseline expectations [1]. - **Global Stock Builds**: Global visible stock builds have slowed to 0.7 mb/d over the last two weeks, down from 1.7 mb/d over the previous four weeks, attributed to Kazakhstan disruptions and higher heating demand [1][11]. - **OECD Stocks**: OECD commercial stocks accounted for nearly all of the global visible builds in the last two weeks, indicating a negative price impact [1][11]. - **Oil on Water**: The volume of oil on water peaked in early January but remains at the 94th percentile of its historical distribution. Sanctioned suppliers (Russia, Iran, Venezuela) now account for two-thirds of current storage on water [1][6]. - **Venezuela Production Decline**: Venezuela's oil production from the Orinoco Belt decreased by 120 kb/d (23%) in early January, but disruptions are expected to be short-lived due to potential easing of US sanctions [1][2]. Additional Important Insights - **Brent Spot Prices**: Spot Brent is trading at $64-65, which is $4-5 per barrel above January expectations. Disruptions in Kazakhstan production account for about half of this price increase [5]. - **Geopolitical Risk Premium**: The remaining price increase is attributed to a rise in geopolitical risk, particularly related to Iran [5]. - **Market Sentiment**: The options market indicates an 18% probability that Brent futures will expire above $70 per barrel, reflecting ongoing geopolitical concerns [8]. - **Refining Margins**: US diesel margins increased by $8 last week due to cold weather, while average crude tanker freight rates jumped by 35% ($1.4/bbl) over the last two weeks [13][51]. - **Production Forecasts**: The report includes forecasts for new supply projects expected to come online through the summer, with significant contributions from Brazil and Saudi Arabia [25]. Conclusion - The oil industry is currently facing significant disruptions, particularly from Kazakhstan and Venezuela, which are impacting global supply and prices. The geopolitical landscape remains a critical factor influencing market dynamics, with potential implications for future production and stock levels.