HSBC lowered oil price forecast, raised target prices of China’s three oil giants by 1% – 6%
COMMODITIES COMPANY NEWS STOCKS VIEWS & ANALYSIS
HSBC lowered oil price forecast, raised target prices of China’s three oil giants by 1% – 6%
COMMODITIES COMPANY NEWS STOCKS VIEWS & ANALYSIS

HSBC lowered oil price forecast, raised target prices of China’s three oil giants by 1% – 6%

 

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Despite production cuts by OPEC+ and Saudi Arabia, macro issues are limiting the rise in oil prices, HSBC Global Research said in a note. 

The broker lowered its Brent oil price forecast to $80 per barrel for 2023, and to $75 per barrel for 2024. In addition, it said China’s oil demand was strong in the second quarter, but downstream profits narrowed due to macro issues and supply-demand imbalance.

HSBC maintained its Buy rating on PetroChina and CNOOC and kept the Hold rating on Sinopec. The broker is bullish that PetroChina will benefit directly from natural gas price reforms, while its upstream fundamentals look resilient. It sees limited downside for CNOOC despite weak oil prices as its sales is growing at around 6% to 7% per year.

HSBC raised its target prices for the three state-owned oil giants by 1% – 6%, and expected a possible update of shareholder return policy after the SOE reform, which could help boost market sentiment and foster re-ratings.