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<Research>BOCI Lowers Oil Price Forecasts, Downgrades SINOPEC CORP to Hold
Recommend 21 Positive 42 Negative 17 |
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As OPEC+ unexpectedly accelerated the unwinding of its production cuts, international oil prices saw a sharp decline in early April and have remained weak since, BOCI wrote in its research report. The alliance is now prioritizing market share over oil prices since other oil-producing countries have increased output during its previous production cuts. By keeping oil prices low, OPEC+ can force other producers to cut capital expenditure and/ or output, thereby regaining market share over time, BOCI opined. As a result, the broker estimated that oil prices would remain subdued for some time. BOCI lowered its oil price forecasts for 2025-26 by 7-8%, with the average Brent crude price forecast for 2025 cut from USD72 per barrel to USD66 per barrel, the 2026 forecast reduced from USD67 per barrel to USD62 per barrel, and the 2027 forecast trimmed from USD65 per barrel to USD64 per barrel. Meanwhile, the broker's long-term oil price forecast remained unchanged at USD65 per barrel. BOCI downgraded SINOPEC CORP (00386.HK) to Hold and dropped its target price from HKD4.58 to HKD4.32. Its rating on China's oil sector was also downgraded to Neutral. In addition, the broker chopped its target price for CNOOC (00883.HK) from HKD23.55 to HKD22.14 and for PETROCHINA (00857.HK) from HKD8.08 to HKD7.17, with a Buy rating remaining in place. AAStocks Financial News |
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