Energy counters gain ground on oil's advance
Energy stocks surged yesterday after oil prices jumped for a third day while investors bet the global economy would keep its motor running amid a looming United States slowdown.
After lagging behind the broader market last month, energy issues have been the front runners so far this month.
Analysts said investors were speculating that past losses were excessive and the impact of a US economic slowdown would not destabilise oil prices as much as previously thought.
'We see this as a buying opportunity,' said CLSA head of China oil and gas research Gordon Kwan. 'The market is pricing in an environment where oil prices could fall to US$50 or US$60 a barrel, and I just don't see this happening.'
Oil prices were more likely to average at least US$80 this year, with upside potential if the global economy started to show signs of recovery, Mr Kwan said.
Crude oil futures rallied 1.98 per cent on Monday in New York to US$93.59 per barrel, the highest in almost a month, after Venezuela threatened at the weekend to cut its fuel exports to the US.
However, a senior Venezuelan official said yesterday the country would want to avoid doing that because the move would be costly.
After slumping at the end of last month, US crude was trading lower at US$92.38 at midday in London, 7.27 per cent off its closing high of US$99.62 set on January 2.
Shares of PetroChina, the mainland's largest oil producer, yesterday rose 2.82 per cent to HK$10.94.
CNOOC, the country's largest offshore oil producer, added 2.36 per cent to HK$11.28.
China Petroleum & Chemical Corp, Asia's largest oil refiner, climbed 1.43 per cent to HK$8.52.