Bank of America Securities: Expect China to gradually increase crude oil imports, lowering PETROCHINA (00857) target price to HK$11.

Bank of America Securities released a research report stating that they have lowered the profit forecast for PETROCHINA (00857) for the 2026/2027 fiscal year by 8%, to reflect the latest Brent crude oil price assumptions of $77 per barrel for the second half of 2026 and $70 per barrel for the full year of 2027. The target price has been lowered from HK$12 to HK$11, and a "buy" rating is maintained. The bank believes that China has become a significant factor in global oil consumption. Customs data shows that in May, China's crude oil imports decreased by 29% year-on-year to 7.8 million barrels per day. With the gradual normalization of shipping flow through the Strait of Hormuz, it is expected that China will gradually increase crude oil imports, rather than quickly returning to pre-US-Iran war levels, mainly due to adequate crude oil inventories; weak domestic demand leading to low refinery operating rates; and ongoing logistical bottlenecks. The bank has lowered its 2026 crude oil demand forecast to 15 million barrels per day, a 5% decrease year-on-year, and lowered its net import forecast to 10.6 million barrels per day, an 8% decrease year-on-year. Additionally, due to high costs for large industrial users and weak profitability, the penetration rate of natural gas is slowing down. The bank has revised down its forecast for 2026 natural gas demand growth to 1% year-on-year, and delayed the demand recovery to 2027.