The oil and petrochemical sector launched a strong offensive in today's (July 23) trading session. The Huabao Oil ETF (159019), which provides one-click exposure to the entire oil and gas industry chain, opened higher and maintained elevated levels, with its intraday price rising as much as 2.16%. At the time of writing, it is up 2.05%.
Regarding its constituent stocks, at the time of writing, Potential Energy surged over 11%, while Jereh, Shuifa Gas, and Zhongman Petroleum hit the daily limit-up. Heshun Petroleum, Dowell, Blue Flame Holding, and others also ranked among the top gainers.
Catalyst for the Move
The immediate catalyst is the continued escalation of geopolitical tensions in the Middle East. Analysis suggests that crude oil is experiencing sharp short-term volatility due to these geopolitical factors. In the medium term, as supply recovery remains slow, prices may oscillate within a range of $80 to $90. Looking further ahead, the industry faces a structural overhaul, with supply security and diversification becoming core considerations. The refining and chemical sector benefits from a contraction in global supply, leading to improved profitability. Domestically, the industry is transitioning towards high-end materials, shifting the competitive focus to comprehensive capabilities.
Market Outlook
Looking forward, analysis from CITIC Securities indicates that some oil wells were forced to shut down during the recent strait closures, and prolonged shutdowns could lead to permanent loss of some production capacity. In the long term, against a backdrop of low capital expenditure, the number of drilled but uncompleted wells and new drilling in the US has repeatedly hit new lows. This suggests that the US's high crude oil output may be unsustainable, potentially leaving future spare supply and pricing power in the hands of Middle Eastern producers. However, the probability of conflict during economic downturns is increasing, and real-world contradictions are becoming more pronounced, systematically raising the risk premium for energy assets.
Everbright Securities noted that the chemical sector delivered strong earnings performance in the first half of 2026, with a significant uplift in the profit center. The petrochemical and chemical sectors had undergone an extended period of adjustment, but the fundamental trend of improving supply and demand remains intact. Current sector valuations offer attractive medium-term allocation value, and it is advisable to focus on leading companies within various sub-sectors of the petrochemical and chemical industries.
Focus on the Huabao Oil ETF
For a one-stop investment in the entire oil and gas industry chain to capture the opportunities of the energy security era, the Huabao Oil ETF (159019) warrants attention. This ETF tracks the SZSE Oil & Gas Index. Its portfolio of constituent stocks provides comprehensive exposure to approximately 50 A-shares across related fields such as oil and gas exploration and development, oilfield equipment and services, and gas transmission and distribution. The "Big Three" Chinese oil giants account for nearly 40% of the portfolio.
Please refer to the fund's legal documents for details on fees.
Data source: Shanghai and Shenzhen Stock Exchanges, as of July 23, 2026. Reminder: Recent market volatility may be significant. Short-term gains or losses do not predict future performance. Investors must make rational investment decisions based on their own financial situation and risk tolerance, paying high attention to position sizing and risk management.
Risk Disclosure: The Huabao Oil ETF passively tracks the SZSE Oil & Gas Index. The index base date is December 31, 2002, and it was launched on December 30, 2014. The composition of the index's constituent stocks is adjusted according to its compilation rules. Its back-tested historical performance does not indicate future index performance. Individual stocks mentioned are presented solely as an objective display of index constituents and are not individual stock recommendations, nor do they represent the investment direction of the fund manager or the fund. All information appearing herein is for reference only. Investors are solely responsible for any independent investment decisions. Furthermore, any views, analysis, or forecasts herein do not constitute investment advice of any form to readers, and no liability is accepted for any direct or indirect losses arising from the use of this content. Investors should carefully read the Fund Contract, Prospectus, Fund Product Key Facts Statement, and other fund legal documents to understand the fund's risk-return characteristics and choose products suitable for their own risk tolerance. Past fund performance does not predict its future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. According to the fund manager's assessment, the Huabao Oil ETF carries a risk rating of R3 (Medium Risk) and is suitable for Balanced (C3) and higher risk-tolerance investors. The final suitability assessment opinion is subject to the selling institution. Selling institutions assess the fund's risk according to relevant laws and regulations. Investors should promptly note the suitability opinions provided by the fund manager. Suitability opinions from different selling institutions may not be consistent. The risk rating results provided by fund selling institutions shall not be lower than those provided by the fund manager. The description of the fund's risk-return characteristics in the fund contract and its risk rating may differ due to different consideration factors. Investors should understand the fund's risk-return profile and make prudent fund selections based on their investment objectives, horizon, experience, and risk tolerance, bearing the associated risks themselves. The China Securities Regulatory Commission's registration of this fund does not indicate a substantive judgment or guarantee of its investment value, market prospects, or returns. Fund investment involves risks.
The MACD golden cross signal has formed, and these stocks are performing well.
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