【1】Market Performance: The BU 2602 contract fluctuated upward during the day but retreated from highs in late trading, closing at 2,996 with a gain of 0.27%. The intraday high was 3,004, while the low was 2,975, marking a cumulative 1.3% increase over the past seven days. The next-month contract, 2603, rose 0.13%, maintaining a Contango structure with near-term prices lower than deferred prices.

【2】Spot Market: ① Shandong heavy-duty asphalt spot price stood at 2,920 yuan/ton, flat from the previous day and unchanged over the past week. The Shandong basis was -76 yuan/ton, narrowing by 33 yuan/ton over seven days. ② East China heavy-duty asphalt spot price was 3,090 yuan/ton, also flat. The East China basis was 94 yuan/ton, down 93 yuan/ton over the week.

【3】Crack Spread Dynamics: ① The BU-Brent spread recorded -71 yuan/ton, widening by 46 yuan/ton over seven days. The BU main contract rose 0.27%, while Brent crude edged up 0.2% (based on closing prices at 3 PM). Oil prices remain volatile due to geopolitical tensions in Venezuela, with short-term stability still uncertain. Asphalt’s role as an oil hedge is challenging, warranting caution toward crack spreads.

【4】Fundamental Developments: Recent disruptions in Venezuelan exports remain a key market risk. U.S. and EU sanctions have hindered Venezuela’s oil exports, forcing crude storage on tankers. While Chevron holds a limited license to operate in sanctioned Venezuela—with President Maduro vowing to uphold contracts—Venezuela’s crude supply relies heavily on Chevron and state-owned PDVSA. The latter accounts for a larger share, primarily exported to China, which absorbs about 80% of Venezuela’s crude. This makes Chinese refiners (especially those processing heavy oil for asphalt) highly dependent on Venezuelan supply. Any delays or halts could tighten regional heavy oil and asphalt availability, supporting prices—a core bullish thesis. However, geopolitical negotiations between the U.S. and Venezuela require close monitoring.

Fundamentally, diluted asphalt discounts have widened. As of Dec. 23, Malaysia’s diluted asphalt discount reached -$14.03/barrel, expanding from -$13.46/barrel on Dec. 12. Inventory data showed social + in-plant stocks at 642,000 tons, up 0.9% weekly, indicating slow destocking. Shandong spot prices show signs of stabilization, with winter storage demand providing support, suggesting range-bound trading for asphalt.

【6】Strategy: Expect continued wide fluctuations in single-direction trades.