ATHENS: China is riding to the rescue. Or maybe fret even more because of that. PetroChina saw its mainland-listed A-shares jump almost 10% Monday. What explained this stellar performance? Certainly not a jump in the price of the company’s main product: Brent crude dropped more than 3% to around $58 a barrel, its lowest level since April.
Instead, investors can thank Beijing’s break-glass responses this weekend to slumping Chinese stocks, jamming funds into domestic shares, especially those of large-capitalization stocks like PetroChina.
But while the Chinese authorities’ panic gave its oil champion’s shares a boost, it has the opposite effect on oil itself. China’s appetite for oil was the biggest factor keeping prices high over the past decade or so—and it is still forecast by the International Energy Agency to account for 29% of global demand growth this year. So any sign of the wheels coming off its economy will have oil traders pushing the “sell” button. PetroChina’s Hong Kong-listed H shares fell by nearly 2%.
