According to Zhito Finance APP, Guosheng Securities released a research report stating that against a backdrop of fluctuations, the petrochemical sector is expected to welcome strategic allocation opportunities. During periods of rising oil prices, the petrochemical sector often achieves excellent relative performance. Taking the previous bull market from 2014 to 2015 as an example, during the earlier declining phase of oil prices, the overall performance of chemicals lagged behind the large cap. However, during the oil price rising phase (from March 17, 2015, to June 12, 2015), WTI oil prices rose by 38%, and the petrochemical sector surged by 121%, outpacing the SSE composite index (+47%) with impressive performance. Recently, amid changes in geopolitical issues, supply, and demand factors, the possibility of oil price fluctuations has increased. If oil prices (after a significant drop or consolidation) enter a phase of upward movement, the petrochemical sector is likely to welcome strategic allocation opportunities.

Zhongsheng Securities' main points are as follows:

Macroeconomic level: The Federal Reserve has initiated the current interest rate cut cycle in an "unconventional" manner, waiting for demand to stabilize.

In September 2024, the Federal Reserve began a new round of interest rate cuts with a 50 basis point decrease. According to their review, in the seven interest rate cut cycles since 1980, oil prices have mostly been weak due to sluggish demand. If the economy worsens to recession during the later stages of the rate cuts, there is also the possibility of a significant decline in oil prices. Therefore, before the global macroeconomic situation stabilizes in the medium term, they believe that oil prices may be suppressed by recession expectations for a certain period.

Demand level: Recent growth has slowed, but there is no need to be overly concerned in the long term.

They used the difference between the contribution of global GDP growth to demand and the drag caused by new energy penetration as the basis for measuring demand changes.

From 2000 to 2023, the global average annual growth rate of crude oil was 1.57 million barrels per day (1.8%), during which the corresponding global real GDP average growth rate was 3.3%. Based on this, the bank estimates that the increase in crude oil demand supported by global GDP growth from 2024 to 2026 will be approximately 1.34, 1.41, and 1.43 million barrels per day (corresponding growth rates of 1.3%-1.4%). Additionally, the bank calculates that the penetration of electric vehicles and the efficiency improvement of fuel vehicles may detract from crude oil demand by 0.33, 0.48, and 0.52 million barrels per day, resulting in expected additional crude oil demand of 1.01, 0.93, and 0.9 million barrels per day, while the current total global crude oil demand is approximately 0.1 billion barrels per day.

On the supply side (non-OPEC): The growth of non-OPEC crude oil supply in 2025 may already meet the increase in global demand.

According to EIA forecasts, global non-OPEC crude oil production will reach 1.62 million barrels per day in 2025, with 71% of the growth contributed by the USA, Canada, Guyana, and Brazil. When comparing the increases in supply and demand, IEA and EIA estimate that the global crude oil demand increase in 2025 will be 1 and 1.22 million barrels per day, respectively, while the global non-OPEC crude oil supply increase will be 1.5 and 1.62 million barrels per day. The two major institutions predict that the supply increase exceeds the demand increase by +50 and +0.4 million barrels per day, respectively, estimating that the growth in non-OPEC supply in 2025 has met the global demand increase. Therefore, changes in OPEC+ supply will become a key factor influencing the crude oil supply and demand pattern.

On the supply side (OPEC+): OPEC+ production cuts may face a reversal, closely monitoring the situation between Israel and Iran.

Factors contributing to OPEC+ supply increase: A review indicates that during the three rounds of production cuts since 2022, OPEC's actual production cut volume did not meet the agreed reduction amount. At the same time, their output is gradually increasing on a monthly basis. Therefore, it is estimated that after the new round of 2.2 million barrels per day production cuts is lifted in January next year, the expected production increase of OPEC+18/OPEC-9 countries in the next 12 months will be approximately 0.6/0.52 million barrels per day.

Factors contributing to OPEC+ supply decline: Due to the escalation of the situation between Israel and Iran, the US government announced that it would further expand sanctions against Iran's oil and gas. Currently, Iran is still exempt from OPEC production cuts. If the sanctions intensify and effectively reduce supply, Iran's potential output increase (which has increased by 0.71 million barrels since 2023) could offset the expected production increase of OPEC+.

Investment advice:

If oil prices enter a phase of upward movement (after significant declines or consolidation), focus on the high-growth "energy spread," oil and gas symbol satellite chemical (002648.SZ), Ningxia Baofeng Energy Group (600989.SH), zhongman petroleum (603619.SH); favor high-dividend oil and gas assets China National Offshore Oil Corporation (600938.SH), petrochina (601857.SH), china petroleum & chemical corporation (600028.SH), and suggest paying attention to petrochemical symbols that benefit from rising oil prices such as rongsheng petro chemical (002493.SZ), hengli petrochemical (600346.SH), tongkun group (601233.SH), xinfengming group (603225.SH), hengyi petrochemical (000703.SZ), and others.

Risk warning: Changes in OPEC+ production, geopolitical risk, macro uncertainty, and estimation error risk.