Chinese oil inventories rise ahead of OPEC+ meeting
By Justina Lee
Shares of Hong Kong-listed Chinese oil stocks are up in Monday trading ahead of the monthly OPEC+ meeting, where the production outlook will be discussed.
PetroChina Co. is the top gainer among China’s three oil majors, rising as much as 3.0% to 3.78 Hong Kong dollars (US$0.48) at the start of the session. It was up 2.5% last time. Cnooc Ltd. was also up 2.5% while China Petroleum & Chemical Corp. gained 2.2%.
Traders are closely watching the meeting of the Organization of the Petroleum Exporting Countries and its allies amid concerns over China’s tightening Covid-19 measures and central banks’ hawkish stance against high inflation.
The group of oil producers is expected to hold steady levels at the meeting, The Wall Street Journal reported earlier, citing unnamed sources.
“While we expect [OPEC+] group to keep output unchanged, the rhetoric may be bullish as it seeks to halt the recent fall in [oil] price,” ANZ analysts said in a note on Monday.
Although the outlook for oil is uncertain as Beijing’s Covid-19 restrictions threaten to dampen demand recovery, Citi analysts said in a note that upstream oil majors like PetroChina and Cnooc will still generate good profits, noting that refinery utilization in China has improved.
Citi names PetroChina and Cnooc as its preferred picks in China’s oil sector.
Write to Justina Lee at justina.lee@wsj.com