Bank of America Securities raises this year's oil price forecast, increasing PetroChina's target price to 12 yuan

Bank of America Securities raised its forecast for this year's Brent crude oil base price to USD 92.5 per barrel, and expects that if the war continues for more than 2 to 4 weeks or energy assets are damaged, oil prices may soar further. Based on historical data, if a daily loss of over 10 million barrels of oil supply persists for 12 months, it could push the Brent crude oil price from USD 70 per barrel before the US-Iran war to between USD 150 and 200.

The bank has lowered its forecast for China's apparent crude oil demand this year to 786 million tons, indicating a year-on-year decline of 1%, and has reduced its natural gas demand growth forecast from 3% to 2%, as the Asian spot liquefied natural gas (LNG) benchmark price JKM has risen by 91% since the end of February. Supply disruptions are affecting Qatar's LNG exports, and shipping costs for natural gas may remain high, weakening the competitiveness of natural gas and exacerbating the coal-to-gas substitution, suppressing mid-term natural gas demand growth.

In terms of stocks, the bank believes that PetroChina (00857.HK) will benefit from rising oil and gas prices, raising its forecast for the company's after-tax net profit this year by 23% to RMB 185 billion, increasing the target price for PetroChina's H shares from HKD 10.5 to HKD 12, and raising the target price for PetroChina's A shares (601857.SH) from RMB 12.5 to RMB 14, maintaining a "Buy" rating.

Additionally, the bank has lowered its forecast for Sinopec (00386.HK) this year's after-tax net profit by 12%, reducing the target price for Sinopec's H shares from HKD 6 to HKD 5, and lowering the target price for Sinopec's A shares (600028.SH) from RMB 7.6 to RMB 6.3, maintaining a "Buy" rating, believing that its downstream business is relatively neutral and benefits less from high oil prices