HK Stock Market Move | Oil stocks are generally rising, as supply pricing may drive the oil market to rebalance. The profit center of the "three barrels of oil" is expected to rise.

Oil stocks generally rose. As of the deadline, PetroChina (00857) rose by 4.2% to HK$6.2; CNOOC (00883) rose by 3.48% to HK$19.64; China Oilfield Services (02883) rose by 2.94% to HK$6.66; Sinopec (00386) rose by 2.83% to HK$4.72. On the news side, overnight crude oil prices fell. Despite the improved market sentiment since the Fed rate cut and the escalation of tensions in the Middle East, weak economic data from Europe has suppressed the upside of oil prices. EB SECURITIES believes that supply pricing is expected to drive the oil market back to balance. According to IMF forecasts, the fiscal breakeven oil price for Saudi Arabia, the major oil-producing country in the Middle East, has reached $96.2 per barrel in 2024 and is expected to be $84.7 per barrel in 2025. In order to avoid oil prices staying below the fiscal breakeven oil price for a long time and to safeguard national fiscal surplus, Middle Eastern countries have a strong willingness to maintain high oil prices. In addition, US shale oil and Russian oil are also expected to participate in determining the cost price of oil, jointly supporting oil prices. The bank pointed out that from a dynamic perspective, in the context of oil price fluctuations, it still firmly believes in the long-term investment value of the "Big Three" oil companies. With tension in the Middle East geopolitics and the tightening of oil supply and demand under OPEC+, it is optimistic that oil prices will remain relatively high in 2024. The "Big Three" oil companies have shown strong performance resilience in periods of oil price volatility, and their profit center is expected to further rise.