[January 2026 - Monthly Report on Macro and Crude Oil Market]

[Macroeconomic Section]

In January 2026, the global economy began with a pattern of "weak recovery and high divergence." The World Bank, in its latest "Global Economic Prospects" report, slightly raised its global economic growth forecast for 2026 to 2.6%, but emphasized that growth momentum is highly concentrated in developed economies, while emerging markets face overall pressure. The US economy continued to show resilience, with December CPI rising 2.7% year-on-year, and core CPI falling to 2.6%, a four-year low, indicating a marginal easing of inflationary pressures. However, Federal Reserve officials maintained hawkish stances, with Richmond Fed President Barkin stating that "inflation typically rebounds at the beginning of the year," leading to a significant cooling of market expectations for interest rate cuts in 2026. While the interest rate swap market still priced in 50 basis points of cuts for the year, options trading has seen bets on "no rate cuts throughout the year." Concurrently, the Trump administration adopted a tough stance on Iran, canceling high-level dialogues and threatening a 25% tariff on countries engaged in economic and trade relations with Iran, causing geopolitical risks to escalate once again.

Domestically, China's economy has had a solid start. In 2025, the total value of imports and exports of goods reached RMB 45.47 trillion, a year-on-year increase of 3.8%, with exports increasing by 6.1%. Imports hit a record high, indicating a moderate recovery in domestic demand. Monetary policy maintained a moderately loose tone. In January, the People's Bank of China (PBOC) conducted RMB 240.8 billion of 7-day reverse repos with the interest rate remaining at 1.40%. The annual work conference also clearly stated "promoting a reasonable rebound in prices" as an important goal for 2026. Orient Golden Credit Rating expects a full-year interest rate cut of 20-30 basis points and a 1-2 times reduction in the reserve requirement ratio. Notably, the PBOC has increased its gold reserves for 14 consecutive months, while net reducing its holdings of US Treasury bonds by approximately US$79.9 billion, as the US dollar weakens and the RMB exchange rate strengthens, the diversification strategy of foreign exchange reserves continues to advance. In terms of industrial policy, the Ministry of Industry and Information Technology (MIIT) issued the "Action Plan for Promoting High-Quality Development of Industrial Internet Platforms (2026-2028)", proposing to build over 450 industrial internet platforms by 2028, and accelerate technological breakthroughs in all-solid-state batteries, high-level autonomous driving, and other fields, injecting new momentum into manufacturing upgrades.

Looking ahead to February 2026, the Spring Festival holiday will disrupt domestic economic data, but the pace of resumption of work and production after the holiday and the effectiveness of pro-growth policies will be key observation points. On the international front, the Federal Reserve is likely to hold steady at its February meeting, but whether it will cut interest rates in March will depend on inflation and employment data for January and February. If geopolitical conflicts do not escalate further, the global macroeconomic environment may maintain a "stable externally, easing internally" pattern, providing moderate support for commodity prices.

[Crude Oil Section]

In January 2026, international crude oil prices experienced a strong rally driven by a significant escalation in geopolitical risks. At the beginning of the month, the U.S. government announced a total termination of diplomatic contact with Iran and threatened to impose secondary sanctions on third parties engaging in energy trade with the country, triggering deep market concerns over supply disruptions in the Middle East. Meanwhile, the recovery of production at Kazakhstan's Tengiz field was slower than expected, and a periodic cold snap in Texas led to the temporary shutdown of some shale oil capacity, further intensifying expectations of a short-term supply tightening.

Despite loose global fundamentals – the IEA pointing to a potential inventory build-up cycle in the first half of 2026, a marginal decline in OPEC+ production cut compliance, and a seasonal drop in Chinese refinery utilization rates due to the approaching Spring Festival – these bearish factors have been temporarily "priced out" in the face of geopolitical premiums. The price trend is characterized by a "low open, high close, and strong finish," with the technical pattern showing no effective retracement, indicating that the market is consistently dominated by bulls, experiencing only brief consolidation after surges, and overall sentiment is bullish.

Looking ahead to February 2026, the crude oil market will enter a rebalancing phase between geopolitical risks and fundamental realities. On the one hand, tensions between the US and Iran have not eased. If maritime shipping in the Red Sea is attacked again or passage through the Strait of Hormuz is restricted, risk premiums could rise further. On the other hand, heating demand in the Northern Hemisphere is peaking, and global refineries are gradually entering their spring maintenance season. Coupled with no signals from OPEC+ to deepen production cuts and high non-OPEC supply (especially from the US and Brazil), fundamental support is limited. Furthermore, although the Federal Reserve is highly likely to keep interest rates unchanged at its February meeting, if the January non-farm payrolls or CPI data exceed expectations, pushing back rate cut expectations, a stronger dollar could also put downward pressure on oil prices.

Overall, oil prices are expected to continue their high-level range-bound pattern in February, with Brent projected to trade between $60 and $67 per barrel. Upside potential depends on whether geopolitical conflicts spill over, while downside support stems from potential OPEC+ policy interventions and restocking demand following China's post-holiday resumption of work. It is recommended to closely monitor EIA weekly inventories, OPEC+ ministerial meeting developments, and the evolution of the Middle East situation to seize structural opportunities amidst heightened volatility.