Since the beginning of 2024, the international crude oil market trend has been strong, and the price of Brent crude oil has once again reached the 80 US dollars/barrel mark, making it one of the best-performing assets. Driven by this, petroleum stocks also showed outstanding performance. CNPC's A share price increase of more than 20% this month.
Although oil prices have fluctuated all the way up, according to analysts, considering relatively moderate demand, the probability that oil prices will continue to rise sharply in the future is not high.
International oil prices surged 9% in January
As of January 27, Brent crude oil's main 2403 contract closed at $83.83 per barrel, up 1.7% on the same day, up 9% during the month; WTI crude oil's main 2403 contract recently closed at 78.23 US dollars/barrel, with an increase of 8.89% this year.
The rise in international oil prices is supported by fundamentals. According to the data, in the week of January 19, EIA US crude oil inventory - 9.23,000 barrels, expected 2.15 million barrels, previous value - 2.49 million barrels; EIA Oklahoma Cushing crude oil inventory - 2.08 million barrels, previous value - 2.099 million barrels. In the week of January 19, EIA crude oil inventories fell to the largest value since August 25, 2023. On the supply side, in the week of January 19, U.S. crude oil production fell by 1.01 million barrels to 12.03 million barrels. In that week, U.S. crude oil production was the lowest since July 28, 2023.
According to Huatai Futures analysis, according to the inventory data released by the EIA, commercial crude oil inventories fell by nearly 9 million barrels, exceeding the decline in API inventories. Since the beginning of the year, the decline in US commercial crude oil inventories exceeded expectations and was anti-seasonal, mainly due to three reasons. Crude oil production declined due to the cold tide, refinery operating rates remained high, and exports remained high. Furthermore, strategic reserves are slowly increasing. In the medium term, US shale oil production growth will slow significantly in 2024, while refinery starts and crude oil exports will remain high, and the overall balance sheet is still relatively tight. However, in the near future, as refineries gradually enter spring inspections, it is expected that the trend of anti-seasonal storage will ease somewhat.
Xingzheng Futures also believes that considering this week's decline in production data is mainly caused by cold tide weather, actual production cuts are limited as the cold tide ends. At the same time, the current tense geographical situation has some support for oil prices. However, from a macro perspective, macro and demand expectations are still neutral in the short term. Excluding geographical factors, there is still insufficient momentum for crude oil to form a trend upward.
It is worth noting that the OPEC+ Supervisory Committee will hold a video conference on February 1. The meeting will begin at 12 noon Vienna time. The industry expects that it will not change its oil production policy and will maintain current production reduction measures.
The stock price of “three barrels of oil” has continued to rise
Driven to a certain extent by the rise in oil prices, the stock price of “three barrels of oil” has continued to rise sharply recently, making it a dazzling star in the stock market.
Among them,$PETROCHINA (00857.HK)$The A-share price rarely rose or stopped on January 25, and continued to rise 6.38% the next day. Since this year, it has bucked the trend and surged 20.4%. The Hong Kong stock, CNPC, rose 10.66% during the month.$SINOPEC CORP (00386.HK)$The increase reached 7.88% on January 25, and increased 4.3% during the year. Hong Kong stocks$CNOOC (00883.HK)$The trend was strong. It rose 12.15% this month, and the stock price recently closed at HK$14.58, continuing to reach a new high since listing.
Guotai Junan pointed out in the research report that market value management may be incorporated into the assessment mechanism to stabilize market expectations. Promote the continuous improvement of the operating efficiency of central enterprises. Central petrochemical companies are expected to face a revaluation. The operating performance of petrochemical central enterprises has been stable and improving since 2019: Since the relevant indicators were included in the assessment of listed central enterprises in 2019, the performance of petrochemical central enterprises has been steady, moderate and positive. From 2019 to 2022, the net profit CAGR of CNPC, CNOOC (CNOOC), Sinopec, and Kunlun Energy was 48.72%, 23.74%, 13.58%, and 6.35%. CNOOC Engineering, CNOOC Services, etc. continued to recover with the central rise in oil prices. Furthermore, central petrochemical companies such as Sinopec and CNOOC promise to stabilize investor expectations and capital market confidence by increasing dividend ratios through repurchases by controlling shareholders.
On the other hand, oil prices are rising, and profit expectations of central enterprises have improved: in the medium to long term, upstream Capex investment in oil and gas is insufficient, oil prices have increased over a long period of time in the context of energy transformation, and high-quality development of the domestic economy continues to drive improvements in the performance of petrochemical central enterprises. Guotai Junan believes that the current “three barrels of oil” has plenty of room to reassess the value of overseas energy companies. The state-owned enterprise reform background combined with the “one profit, five rate” and “market value management” assessment goals drives continuous improvement in the ROE of petrochemical central enterprises, the operating efficiency continues to improve, and the valuation of petrochemical central enterprises may be further improved.
Bank of China International covered CNPC (601857) for the first time in the latest research report and gave it a purchase rating. The agency believes that international oil prices remain medium to high, the company continues to increase storage and production, and the profit of the oil and gas extraction business is improving. At the same time, relying on high-quality ethane resources, the company's low cost advantage of ethylene is scarce. On the other hand, the market-based reform of domestic natural gas prices is gradually progressing, and the company is expected to benefit.
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