Three major Chinese oil companies gained between 0.7% and 2.4% as oil prices rebounded from recent declines, with the petrochemical sector outperforming across EJFQ's 25 industry classifications. The Hang Seng Index closed at 24,213 points, up 38 points, supported by buying interest at the 24,000-point level. Brent crude approached $80 per barrel in Asian trading, representing a gain of over 10% from its early-month low. The oil price recovery followed a sharp decline from conflict-driven highs, with Brent having bottomed at $70.14 on July 1 after falling as much as 44.5% from its peak of $126.41 per barrel. The rebound provided support for oil-related stocks amid broader market volatility and geopolitical developments in the Middle East.
Oil Prices Rebound After Sharp Decline From Conflict Highs
Brent crude continued its upward trajectory in Asian trading, approaching $80 per barrel and marking a gain of over 10% from its early-month low point. The recovery follows a period of significant decline, during which oil prices fell nearly 20% in both May and June. On July 1, Brent crude reached a low of $70.14 per barrel, representing a 44.5% decline from its peak of $126.41 per barrel recorded after the escalation of US-Iran tensions. The price movement pushed oil into a technical bear market, with conflict-driven gains nearly fully erased before the recent stabilization.
Brent Crude Historical Volatility Patterns Since 2020
Similar volatility patterns have occurred twice in the past six years. During the second quarter of 2020, the COVID-19 pandemic led to expectations of declining energy demand, causing Brent crude to fall more than 70%. The price recovered its losses within approximately six months as pandemic concerns eased, with volatility returning to pre-crisis levels. In February 2022, Russia's invasion of Ukraine caused Brent crude to spike immediately, but prices returned to previous levels within several months. Following that event, oil prices subsequently fell more than 40% before bottoming, while volatility had already narrowed.
Three Chinese Oil Companies Offer Dividend Yields Above 5.5%
Sinopec (00386), PetroChina (00857), and CNOOC (00883) all reached five-year highs around the time of Middle East tensions. The three companies' stock prices declined significantly alongside oil prices over recent months before rebounding in July in line with the broader market. As of current trading, all three companies offer dividend yields exceeding 5.5%. The stocks completed a valuation cycle from expensive to inexpensive levels during the oil price volatility period.
FAQ
What gains did Chinese oil companies record during the recent trading session?
The three major Chinese oil companies—Sinopec, PetroChina, and CNOOC—recorded gains ranging from 0.7% to 2.4% during the session, with the petrochemical sector outperforming across EJFQ's 25 industry classifications.
How much has Brent crude oil declined from its peak this year?
Brent crude oil peaked at $126.41 per barrel following the escalation of US-Iran tensions, then bottomed at $70.14 per barrel on July 1, representing a decline of 44.5% from the peak. The price has since rebounded to approach $80 per barrel, gaining over 10% from its early-month low.
