Oil

Oil: JP Morgan highlighting that with a fall in crude oil prices and a generally weak refining/petrochemicals environment, the house do not expect any significant earnings momentum for most Asia Oil & Gas under coverage when the reporting season starts next week. However, believe that the sector’s 15% underperformance in absolute since Sept seems to have largely reflected lower expectations for oil prices and weakening regional demand, particularly in China. Expect an improvement in Brent in the coming months and believe that the recent slide in some stocks could present investors with a good buying opportunity. The house have a preference for more upstream leveraged names. PetroChina and CNOOC are all O/ws. OSKDMG turning negative on players with deepwater exposure. Instead, they are recommending investors go for shallow-water plays like Ezion and Nam Cheong whose operations are unlikely to be affected by oil prices.