1) Spreads: On December 12, the SC night session 1-3 month spread stood at -0.7 yuan/barrel (equivalent to -0.1 USD/barrel). Meanwhile, Brent's 1-3 month spread was 0.54 USD/barrel, and WTI's 1-3 month spread was 0.36 USD/barrel. The SC night session-Brent front-month contract spread was 0.21 USD/barrel, while the SC night session-WTI front-month spread reached 3.84 USD/barrel.

2) Arbitrage Analysis: - Valuation: At 2:30 AM on December 12, Brent 2602 futures traded at 61.06 USD/barrel, while SC 2603 futures were priced at 438.3 yuan/barrel. The theoretical price for SC 2603 was calculated at 458.9 yuan/barrel, indicating a -4.5% deviation from market valuation. Based on the 7-day moving average valuation range of [-5%, 0], current valuations hover near the lower bound of normal levels. - Profitability: The estimated landed profit for SC2603 futures showed a loss of -20.00 yuan/barrel (-2.84 USD/barrel). - Spread Comparison: The SC2603-Brent2602 spread was 0.94 USD/barrel versus a theoretical spread of 3.78 USD/barrel, indicating the market spread remains below theoretical levels. (Note: Last week's Brent front-month was 2602 and SC front-month was 2601, with "M" representing December.)

3) Market Summary: - Month Spreads: The weakening 1-3 month spread this week reflects the weak physical market and subsequent recovery in back-month contracts. Overseas crack spreads remain subdued due to gradual refinery restarts in Europe and the US coupled with weak downstream demand. - Cross-Regional Spreads: The 7-day moving average of SC-Brent spreads showed continued oscillation last week. With freight rates rebounding after their recent correction and seasonal winter demand potentially boosting Chinese consumption, the SC-Brent crack spread may see further recovery. However, given the overall bearish oil market sentiment, caution is advised when considering long spread positions.

Short-term Outlook: The oil market has re-entered a phase where supply surplus pressures contend with geopolitical and macroeconomic factors. While escalating geopolitical tensions have introduced volatility, their impact on prices has been weaker than expected. Increasingly visible supply glut data—the core market driver—continues to strengthen bearish dominance, pushing oil prices lower. Trading strategy should focus on high-point selling opportunities while carefully monitoring market rhythms.