International oil prices return to $100! Oil and gas, coal sectors collectively pullback, how to view the market outlook?

Why does the surge in international oil prices trigger a correction in the energy sector?

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Tensions in the Middle East continue to escalate, causing international oil prices to rise steadily. On the evening of March 15, Eastern Time, both the NYMEX April crude oil futures and the London Brent May crude oil futures briefly broke the $100 per barrel mark.

This price trend, which affects the nerves of the global economy, has attracted widespread market attention.

AI Illustration by He Menglu

Financial investment reporters note that although international oil prices have continued to rise recently, the upward momentum has slowed. In the A-share market, sectors directly benefiting from rising oil prices, such as oil and gas, were among the first to correct. By the close on March 16, core beneficiaries like CNOOC and PetroChina had fallen by 1.88% and 0.5%, respectively.

Coincidentally, the previously strong coal sector also experienced a noticeable correction after a sustained rebound. The sector surged nearly 5% on March 2, then continued to fluctuate upward for several trading days. However, on March 16, the coal sector overall declined by 1.87%, with most stocks in the sector turning green, including Zhengzhou Coal & Electricity, Antai Group, and Pingmei Shares.

As of the close on March 16, most stocks in the coal sector were in the red.

Since March, international oil prices have surged from around $70 per barrel, reaching nearly $120 at their peak, then rapidly fell back to around $80, experiencing an epic rollercoaster. On March 16, oil prices returned to the $100 mark.

The core reason behind this intense volatility is the strategic importance of the Strait of Hormuz. As one of the world’s most critical energy transportation routes, it accounts for about one-fifth of global oil shipments. Any disruption in transportation in this region would significantly impact the global crude oil supply system.

Goldman Sachs latest research report states that due to damage to Middle Eastern energy infrastructure and disruptions in Hormuz Strait transportation, Brent crude oil prices are expected to exceed $100 per barrel in March, then fall back to around $85 in April.

Regarding the oil price trend in the second half of the year, Goldman Sachs believes that if the disruption of energy transportation does not worsen further, Brent crude prices will gradually fall back to the $70+ per barrel level; however, if the disruption lasts longer than expected, prices could reach higher peaks and remain high by the end of the year.

The sharp fluctuations in international oil prices quickly transmit to the domestic market, putting significant pressure on retail fuel prices to rise.

According to domestic bulk commodity monitoring agencies, the estimated increase in gasoline and diesel prices has expanded to 1,300 yuan per ton, equivalent to an increase of 0.95 to 1.00 yuan per liter. The upcoming oil price adjustment window is set for 24:00 on March 23. If international oil prices remain high, further increases are possible.

International oil prices, as the core benchmark of the global energy market, are profoundly affecting the operational ecology of upstream and downstream enterprises in the industry chain.

On March 16, Yueyang Xingchang stated on an interactive platform that the prices of the company’s main raw materials and terminal products are directly affected by international oil prices. However, the changes in terminal product prices are not always proportional to raw material costs, so price increases at the product end may not fully offset rising costs.

Benli Technology recently stated on an interactive platform that international oil price fluctuations have some uncertainty impact on the company. The company will continue to monitor relevant market changes and actively manage operations.

In fact, every sharp fluctuation in international oil prices triggers chain reactions in the A-share market. Not only does it accelerate market style shifts as a “catalyst,” but it also directly guides capital allocation, making energy sectors like oil & gas and coal the most clearly defined “capital pools” during this rotation.

According to a research report from Orient Securities, the transmission logic in the coal market is very clear: on one hand, rising fuel costs directly lead to higher shipping costs; on the other hand, soaring natural gas prices prompt some regions to increase coal-fired power generation as a substitute for expensive natural gas.

Based on incomplete statistics by financial investment reporters, institutions forecast that Gansu Energy Chemical and Hengyuan Coal Power could see performance growth exceeding 10 times by 2026; Shanxi Coking Coal and Yantai Energy are expected to double their performance; companies like Lanhua Sci-Tech and Jiang Tung Equipment are also receiving institutional attention.

If geopolitical conflicts become prolonged, how will they affect market allocation? Zhongtai Securities believes that in the A-share market, risk aversion remains the dominant theme, with trading focused on energy and defensive sectors. Looking ahead, geopolitical conflicts in the Middle East may trend toward “long-term.” Energy security assets are likely to benefit in the short term, while technology assets should focus on avoiding negative impacts from overseas sectors. Compared to these, niche fields driven by domestic industrial cycles and capital market events have greater allocation value.

| Financial Investment Reporter He Menglu |

Editor | He Menglu

Review | Ge Gehou
Third Review | Zhang Jing