(1) The first Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Chol ### 2.2.2 The first Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Chol #### 2.2.2.1 The first Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Ch ### 2.2.2 The first Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the ### 2.2.2 The first Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Chesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Chollesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the second Cholesthe group of the

At a recent meeting of the Dallas Fed Energy Advisory Council, industry executives expressed that companies will continue to maintain a cautious attitude toward production growth, focusing on capital discipline and sustaining investments. This reflects the current robust attitude of the oil and gas industry—in an era facing dual uncertainties in supply and demand, maintaining financial stability is far more important than pursuing expansion through excessive investment.

Capital expenditures are the lifeblood of the energy industry: capital expenditures in the upstream oil and gas sector are primarily used for maintaining and expanding production scales, purchasing asset equipment, and exploring new reserves, specifically covering drilling and completion, construction of oilfield roads and power facilities, geological surveys, and exploration wells in new blocks.

The outlook for capital expenditure is important because it directly impacts future oil and gas supply, which in turn influences current and long-term energy price trends. Given the foundational role of energy in the global economy, industry dynamics have significant spillover effects on macroeconomic indicators such as GDP, employment, and inflation.

From the bank's perspective, capital expenditure holds special significance. Oil and gas companies often need to invest huge upfront costs, and the investment payback period is long, making them highly reliant on equity financing and debt financing. Bank loans are especially an important financing channel for small and medium-sized producers—these companies typically have limited business scale, weak operating cash flow, high leverage ratios, and are more susceptible to price fluctuations due to a lack of vertical integration capabilities.

The oil and gas industry is characterized by significant cyclicality, with price fluctuations leading to boom and bust cycles that are often exacerbated by changes in global demand and the叠加 of geopolitical factors. For example, during the oil price collapse from 2014 to 2016 (from $93 per barrel to $43 per barrel), the industry experienced a wave of bankruptcies, resulting in deteriorating credit quality and loan portfolio performance for banks with high exposure to oil and gas risks.

The subsequent period of low oil prices continues to impact the upstream oil and gas industry. Although structural adjustments have been made through bankruptcies and industry consolidation, most surviving companies have only recently been able to shake off the long-term state of weak profitability, yet仍然 burdened with tight liquidity and high leverage.

Since 2010, the strategic focus of the upstream oil and gas industry has shifted from capacity expansion to maximizing free cash flow, with capital expenditure entering a rational phase. Although global demand recovery in 2022, coupled with the Russia-Ukraine conflict, drove upstream investment back up to $514 billion, this figure is still about $70 billion lower than the peak during the U.S. shale boom in 2011, according to estimates by the International Energy Forum. The reasons for this can be attributed to significant cost reductions and improved oilfield efficiency, along with the industry achieving positive operating cash flow during the recovery period, which together have contributed to the improvement of oil and gas companies' balance sheets.

However, despite the gradual recovery of the industry’s balance sheets and a more rational approach to capital budgeting, the global oil and gas market still needs to be vigilant about two key risk points—price volatility and financing conditions.

The oil and gas market is highly volatile, with price fluctuations potentially triggered by geopolitical events, supply and demand imbalances, natural disasters, and policy adjustments. Sudden price drops or surges can directly impact corporate financial stability. For banks exposed to industry risks, this could lead to a surge in loan defaults and an increase in credit risk. Historical experience shows that downturns in the oil and gas market are often accompanied by waves of bankruptcies and deteriorating asset quality in banks.

Since the end of 2022, OPEC+ (the Organization of the Petroleum Exporting Countries and its allies) has persistently implemented production cuts to stabilize prices. The current voluntary reduction plan of 2.2 million barrels per day is set to phase out by December 2026, but the policy duration could be extended or intensified if member countries reach a consensus. Uncertainties in the crude oil market partly stem from OPEC's dilemma: increasing production would heighten risks if global demand weakens, but sustained output reductions could impact the fiscal balance of oil-producing nations.

At the same time, the oil and gas industry, as a capital-intensive field, often has project profitability cycles that last for years or even decades. The smoothness of financing channels is crucial for maintaining operations and achieving growth. Changes in the source and scale of financing will affect the long-term survival capabilities of enterprises, thereby altering the industry's credit landscape. Notably, private equity financing has recovered post-pandemic, while capital expenditure has shown a contraction trend. Given the significant reduction in the number of unfinished wells, the industry may need to increase investment in exploration and development, which will lead to a higher reliance on external financing.

Although the oil and gas industry has recovered from the pandemic's impact and practiced capital discipline, the development trends in these areas still require continuous attention.

Author: Gao Xing, Senior Market Analysis Expert at ZhuanSu Vision