Understanding the Market | Petroleum stocks continue recent declines as US non-farm payroll data significantly below expectations; institutions say oil price upside is highly limited

Petroleum stocks continued their recent decline. As of the time of publication, CNOOC fell by 3.92% to HKD 19.6, PetroChina fell by 2.35% to HKD 6.65, and Sinopec fell by 1.6% to HKD 4.93. On the news front, on the evening of August 2nd, the U.S. non-farm payroll data came in well below expectations, further exacerbating market concerns about a recession in the U.S. On August 2nd, the WTI crude oil main contract plummeted by 3%, hitting a nearly 2-month low; the Shanghai crude oil futures main contract plunged by over 5% in the night session, marking a new low since February this year. Oil prices have fallen for 4 consecutive weeks, setting a record for the longest weekly decline this year. Guosen Futures stated that concerns about the U.S. economy have overshadowed the tense situation in the Middle East. Soochow Futures analyst Xiao Yu pointed out that the extension of production cuts by OPEC+ has provided support for oil prices, leading the mainstream market view to focus on supply shortages in the second half of the year, with an early upward trend expected in the third quarter. However, the actual demand for crude oil may fall short of expectations, and non-OPEC+ countries are expected to increase production in the second half of the year, limiting the upside potential of oil prices and possibly repeating the downturn seen in the second quarter