According to a report by Jinshi Data on August 5, CICC published a report pointing out that oil prices retreated to below $80 and expectations of a U.S. recession rose. The main reason for the retreat in oil prices since July was market concerns about a global economic recession, with the increase in mid-term oil and gas supply after the U.S. election and China's energy transition suppressing oil demand as secondary factors.
The bank expects that the market will still trade recession expectations before late August. But the risks inherent in oil prices are expected to be relatively high now. As of the end of July, the net short position of crude oil has approached the level of March 2020, and the gold-oil ratio is also close to a historical high.
If OPEC+ maintains production unchanged in the fourth quarter, the central oil price is expected to remain at $80. CICC's strategy team believes that a soft landing is still the basic premise. It trades recession expectations before the rate cut and trades economic recovery after the rate cut. It believes that more attention should be paid to the risk-return ratio after this round of adjustment. Based on an oil price of $60, it believes that the valuation of China National Offshore Oil Corporation (00883.HK) is still relatively reasonable.