HK Stock Market Move | Sinopec (00386) falls by over 4% again, market concerns about disruption in oil supply, UBS points out that if oil prices are too high, Sinopec's profits will decrease.

Sinopec (00386) falls more than 4% again, as of the time of publication, it has dropped by 3.61%, closing at HKD 4.8, with a trading volume of HKD 8.67 billion. On the news front, Iran's new supreme leader, Mojtaba Khamenei, said in his first statement broadcast on national television that Iran will continue to take strategic measures, including the blockade of the Strait of Hormuz, and open new fronts as necessary. In addition, the unprecedented joint release action by the International Energy Agency failed to calm the market as expected, instead exacerbating fears. The market is concerned that the risk of interruptions in oil supply will continue to grow. UBS analyzes the scenario where oil prices range from $50 to $120 per barrel, with CNOOC being highly sensitive to oil prices. Sinopec's profit will also rise with increasing oil prices. It is noteworthy that the basic scenario assumed by the bank is that Brent crude oil will be $72 per barrel this year. If oil prices rise to $80, $90, and $100 per barrel, Sinopec's profits will increase by 8%, 14%, and 13%, respectively. However, if oil prices exceed $100, Sinopec's profits will decline.