PetroChina - back in play given spike in oil prices following latest US-Iran standoff
PetroChina shares $PETROCHINA(00857)$ gained 2.4% to HKD 9.25 yesterday, tracking the rally of Asian energy shares, which look to extend gains after overnight crude brent oil prices jumped 9.6% overnight - its biggest gain since May 2020, according to Bloomberg
🛢Brent crude oil prices continue their climb to yet higher levels this morning as of 905AM, and are now 19% higher since the escalation of the US-Iran conflict on 7 July. PetroChina shares are consequently up another 3.2% this morning to HKD 9.55 as of 935AM
➡The catalyst for the oil spike began on 7 July when the US Treasury revoked the waiver allowing Iranian oil sales, jeopardizing the interim peace deal and reigniting supply disruption fears
Yesterday, US President Donald Trump reinstated the US blockade of Iranian ships transiting the Strait of Hormuz and demanded a 20% reimbursement on all other cargo shipped through the waterway
This latest wave of attacks between the US and Iran dashed hopes for a near-term normalization of traffic through the Strait of Hormuz. The escalation adds another layer of uncertainty ahead of a pivotal week for markets, with earnings season kicking off alongside US inflation data and US Fed Chair Kevin Warsh’s congressional testimony, both seen as key to the outlook for interest rates (Bloomberg)
The latest escalation of the ongoing US-Iran conflict and its impact on oil prices has helped PetroChina shares partially recover from its 24% pullback since its 30 April peak of HKD 12.22
Its sell off over the past three months has led the stock to underperform its global energy peers over the same period, and a compression of its price-earnings ratio from 15x in April to 7.5x currently - a historically low valuation, according to AAstocks.com
📈Technically, the stock is now holding above its 200-day moving average of HKD 9.26, and a sustained close above this level will be the first technical hurdle to watch, according to Bloomberg AskB
AskB also notes that the MACD line (–0.333) crossed above the signal line (–0.425) in the past week, with the histogram turning positive and widening (from +0.007 on Jul 7 to +0.092 on Jul 13). This is a nascent bullish crossover — the first since PetroChina began its decline from the April highs
Investors keen on trading the short-term bullish move in PetroChina shares may wish to consider using the trending PetroChina call warrant $PetroCH MBeCW270105(PLMW.SI)$ (https://warrants.com.sg/tools/livematrix/PLMW) which is currently up 41.7% to SGD 0.017 (as of 940AM) - 6.5 times more than PetroChina's +6.4% gain since 7 April
There is no put warrant available over PetroChina shares
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
