Oil and gas stocks are mostly on the rise. As of press time, China Oilfield Services (02883) is up 5.04% at HK$8.03; Shandong Molong (00568) is up 3.23% at HK$3.84; Sinopec Oilfield Service (01033) is up 2.34% at HK$0.655; CNOOC (00883) is up 1.57% at HK$24.66.
On the news front, mutual attacks between Yemen and Saudi Arabia have escalated. On October 14 local time, according to a Saudi Energy Ministry official, an administrative office building of Saudi Aramco in Dhahran, eastern Saudi Arabia, was attacked, with no casualties reported. U.S. President Trump said in a social media post on the 13th that the Houthi armed forces are striking Saudi Arabia in a "very nasty" manner and are likely deliberately driving up oil prices ahead of the U.S. midterm elections. Dongwu Securities believes that geopolitical conflicts are expected to further strengthen global energy security demands and push up the central level of oil and gas capital expenditure. Reviewing the 2022 Russia-Ukraine conflict, after oil and gas prices remained at high levels, the cash flow of upstream oil and gas companies improved significantly, capital expenditure subsequently rebounded, and further tilted toward LNG, deepwater oil and gas, and unconventional energy sectors.
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