Investment Rating - The report maintains an "Increase" rating for the oil and petrochemical industry [5] Core Viewpoints - International oil prices have shown a downward trend recently, with Brent crude settling at approximately $63.90 per barrel, down about 1.30% week-on-week, and down approximately 15.80% since the beginning of the year [19][21] - The North American active rig count has decreased week-on-week, with a notable year-on-year decline of 37 rigs, indicating a potential future increase in global drilling platform activity [31] - The refining sector shows promising recovery potential, with significant increases in price differentials for various products, suggesting improved profitability for refining companies [35] Market Performance - The CITIC oil and petrochemical sector rose approximately 0.37% during the week of May 26 to May 30, outperforming the Shanghai Composite Index by about 0.39 percentage points [16] - Key stocks that led the gains include Hengtong Co., Hongtian Co., and Compton, while stocks like Guangju Energy and Dongfang Shenghong saw declines [17][18] Investment Recommendations - The report identifies four main investment themes: 1. Focus on major energy state-owned enterprises like China National Petroleum and China National Offshore Oil Corporation, which are pushing for oil and gas exploration and green transformation [53] 2. Increased global upstream capital expenditure benefiting oil service companies such as CNOOC Services and Offshore Engineering [53] 3. Accelerated development of coal chemical projects and natural gas resources in Xinjiang, with a focus on companies like Baofeng Energy and New Natural Gas [53] 4. Refining companies planning new capacities and accelerating new material projects, recommending companies like Satellite Chemical and Hengli Petrochemical [53]