Research indicates that with the upward shift in the oil price floor, expectations for 2026 point to a sustained high-price environment, which will unilaterally benefit oil company earnings.

The recovery in oil price sentiment is expected to encourage increased investment in oil and gas exploration and development.

The U.S. ethane market is projected to maintain a loose supply-demand balance, providing significant earnings elasticity in the event of rising oil prices.

The overseas energy crisis is accelerating the phase-out of outdated production capacity, with large-scale domestic enterprises poised to gain a significant advantage due to their stable supply chains.

Overseas refined oil product supply is expected to provide stronger support.

Downstream polyester sector supply and demand are gradually tightening, with an anticipated improvement in industry conditions.

Key Analysis Points

The average price for Brent crude in April, May, and June 2026 was $102.5, $103.7, and $84.4 per barrel, respectively, with the trading range narrowing to $72-$118 per barrel.

The Q2 average price was $96.7 per barrel, up 23.3% quarter-over-quarter and 44.9% year-over-year, closing at $72.9 per barrel at the end of the quarter.

In Q2 2026, gasoline and diesel prices saw three cumulative upward adjustments and three downward adjustments, resulting in net decreases of 780 yuan and 750 yuan per ton, respectively.

Quarterly Margin Analysis

In Q2 2026, margins for domestic refining, Singapore refining, ethylene cracking, ethylene-ethane, ethylene-naphtha, polypropylene-propane, acrylic acid, butyl acrylate, butadiene-naphtha, and POY expanded sequentially.

Margins for styrene, PXN, and PTA narrowed sequentially.

The domestic refining margin was 1,315 yuan per ton, widening by 302 yuan per ton from the previous quarter.

The Singapore refining margin was $39.8 per barrel, widening by $11.9 per barrel from the previous quarter.

Olefin industry chain margins generally moved higher, with the cost advantage of ethane-based ethylene production increasing.

The ethylene-naphtha margin was $259 per ton, widening by $117 per ton sequentially.

The ethylene-ethane margin was $952 per ton, widening by $316 per ton sequentially.

The polypropylene-propane margin was 430 yuan per ton, widening by 78 yuan per ton sequentially.

The acrylic acid-propylene margin was 2,504 yuan per ton, widening by 451 yuan per ton sequentially.

The average butyl acrylate margin was 2,580 yuan per ton, widening by 203 yuan per ton sequentially.

The average butadiene-naphtha margin was $882 per ton, widening by $151 per ton sequentially.

Polyester industry chain profits diverged, with PX and PTA segment margins narrowing, while filament segment margins expanded.

In Q2 2026, the PX-naphtha margin was $273 per ton, narrowing by $13.0 per ton sequentially.

The PTA-0.66PX margin was 299 yuan per ton, narrowing by 75 yuan per ton sequentially.

The average POY-0.86PTA-0.34MEG margin was 1,599 yuan per ton, widening by 320 yuan per ton sequentially.

Key Company Performance Forecasts for Q2 2026

With the Q2 average crude oil price further elevated to around $96.7 per barrel and supply-side losses expected for the full year, the oil price floor is projected to remain high throughout the year.

Upstream oil and gas exploration and development earnings are anticipated to show significant year-over-year and sequential improvement, while private refining and chemical companies are expected to benefit from sustained high chemical product margins, with the polyester filament segment maintaining high activity.

PetroChina Company Limited (HKG: 0857) – Benefiting from the further rise in the Q2 oil price floor and steady growth in oil and gas output, net profit is forecast at 55 billion yuan (YoY +47.9%, QoQ +13.8%).

CNOOC Limited (HKG: 0883) – With the Q2 oil price floor moving higher, net profit is forecast at 47 billion yuan (YoY +42.6%, QoQ +20.1%).

China Petroleum & Chemical Corporation (Sinopec) (HKG: 0386) – The refining segment is impacted by caps on refined product price increases and taxes/fees, with net profit forecast at 5 billion yuan (YoY -39.2%, QoQ -70.6%).

China Oilfield Services Limited (COSL) (HKG: 2883) – Offshore oilfield services conditions remain robust, with net profit forecast at 1.1 billion yuan (YoY +2.2%, QoQ +28.6%).

Offshore Oil Engineering Co., Ltd. (COOEC) (SHA: 600583) – Continued fulfillment of offshore oilfield services orders is expected, with net profit forecast at 500 million yuan (YoY -10.3%, QoQ +14.0%).

Rongsheng Petrochemical Co., Ltd. (SHE: 002493) – Net profit is forecast at 2.2 billion yuan (YoY +15,979%, QoQ -21.9%).

Hengli Petrochemical Co., Ltd. (SHA: 600346) – Net profit is forecast at 3.3 billion yuan (YoY +230%, QoQ -15.6%).

Jiangsu Eastern Shenghong Co., Ltd. (SHE: 000301) – Net profit is forecast at 3.2 billion yuan (YoY +6,999%, QoQ +123%).

Tongkun Group Co., Ltd. (SHA: 601233) – With filament margins remaining high, net profit is forecast at 2.8 billion yuan (YoY +477%, QoQ +47.5%).

Satellite Chemical Co., Ltd. (SHE: 002648) – The low-cost feedstock advantage of the ethane process route is prominent, coupled with a recovery in operating rates, with Q2 net profit forecast at 4.3 billion yuan (YoY +266%, QoQ +103%).

Risk warnings include geopolitical influences, volatility in oil and chemical product prices, and risks associated with economic downturn.