UBS issued a research report that international oil prices continued to fluctuate in January this year, mainly affected by warmer Chinese demand, strong Russian pipeline oil exports, global economic indicators and interest rate hikes and other factors. The spot price of Brent crude rose slightly to an average of about $82.8 a barrel in January. The bank still expects oil demand to return to 2019 levels this year, but cut its forecast for Brent crude prices this year from $95 to $90 a barrel. Given the continued low investment activity, the bank maintained its medium-term oil price forecast unchanged. As for natural gas the spot price of liquefied natural gas (LNG) in Asia fell 14 per cent month-on-month to $24 per million British thermal units in January due to a significant reduction in the risk of shortage amid warm winters and seasonal increases in European inventories. The bank cut its 2023 and 24 Asian LNG spot price forecasts by about 40 per cent and 25 per cent respectively.

The bank said that judging from last year's initial results, the oil majors made solid profits in the fourth quarter of last year, with Petrochina Company Limited and 00883.HK making better-than-expected initial profits, while refiners' losses widened during the period. The price of crude oil fell from $101 to $89 a barrel during the season, while downstream demand remained sluggish. Nevertheless, the bank expects headwinds to ease this year and refiners' profits to recover gradually.

The bank mentioned that due to the recent rise in the prices of some chemical commodities, it is optimistic about related stocks, namely 002601.SZ Group (LBG), Satellite Chemical (002648.SZ) and 600309.SH. In addition, the bank recommends the A / H shares of China Petroleum & Chemical Corp (600028.SH) with low valuation and high dividend, as well as China Oil Service (02883.HK). Large refiners whose profits are expected to improve, such as 600346.SH and 002493.SZ, as well as fast-growing producers of new materials such as 002006.SZ, A / H shares of 02402.HK (688339.SH) and 300655.SZ. All of the above are rated as "buy".