JPMorgan has released a research report stating that the situation in the Middle East is causing fluctuations in global oil and natural gas prices. If prolonged disruptions occur in the Middle East, the global liquefied natural gas (LNG) market could face a potential supply impact exceeding 20%, leading to increased price volatility and challenging the long-held market view that oversupply will persist until the 2030s. The bank believes the short-term impact on China's gas utilities will be limited, as spot LNG accounts for only about 10% of these companies' total gas resources, thus having minimal immediate effect on their procurement costs. However, if oil and gas prices remain elevated, procurement costs for both piped natural gas and LNG may rise, and industrial gas demand could also be affected. Therefore, the bank maintains a cautious view on the sector. The bank relatively prefers Kunlun Energy (00135) due to its limited exposure to spot LNG, expecting it to perform better than peers in a high energy price environment; it currently assigns a target price of HK$9 and an "Overweight" rating. The bank is also optimistic about the upside potential for ENN Energy (02688)'s share price, as its parent company ENN Natural Gas (600803.SH) has recently seen its stock price rise, with the current A-share and H-share price gap reaching 40%. Additionally, the company's LNG contracts can hedge against the risk of rising spot LNG prices. The bank currently assigns ENN Energy a target price of HK$72.5 with an "Overweight" rating, and ENN Natural Gas a target price of RMB 18.5 with a "Neutral" rating.