Lyon: Oil prices may remain above $80 in the second half of the year, recommended PETROCHINA (00857) and CNOOC (00883).

Lyon issued a research report stating that the Middle East situation has eased, causing oil prices to fall to $85 per barrel. The market generally expects oil prices to return to the $70 level, but considering the damage to production facilities and infrastructure bottlenecks, it is predicted that global oil supply will not recover to the pre-Middle East conflict levels in the next 6 to 12 months. The bank currently predicts that oil prices will remain above $80 per barrel in the second half of the year, compared to an average of $94 in the first half of the year. Chinese oil stocks are expected to benefit from this, recording their best profit and cash flow performance in recent years. It is forecasted that PETROCHINA (00857) and CNOOC (00883) will see a second-quarter profit growth of around 50% year-on-year. In the current market volatility, Lyon believes that PetroChina and CNOOC, with their solid fundamentals and 7% dividend yield, are relatively safe investment choices. Lyon gives the three major oil companies a "outperform the market" rating, with the order of selection being PetroChina, CNOOC, and finally SINOPEC CORP (00386). It is expected that PetroChina will benefit the most from higher oil and natural gas prices, with a target price of HKD 12; CNOOC being removed from the US list of Chinese military companies may lead to a revaluation, with a target price of HKD 36. Sinopec's second-quarter profit may face challenges, with a target price of HKD 4.9 given by Lyon.