A global recovery story drives stronger demand for crude oil worldwide. According to OPEC, world oil demand grew by 1.73% to 97.07 million barrels per day in 2017, with China and emerging European countries recorded 3-4% solid demand growth last year. We expect oil demand remains solid in 2018, with strong demand growth from developing countries such as China and India continues to support oil prices uptrend. Besides, downward pressure from high global oil inventories on oil prices has disappeared as OPEC members and non-OPEC countries, led by Saudi Arabia and Russia, has fully complied with their commitments to cut oil production. Oil prices have surged by 13% this year and climbed by 35% since last June. While we expect the uptrend of oil prices to continues this year amid strong global demand and production curbs, investors are suggested to accumulate CNOOC (883.HK) and Sinopec Corp (386) as a medium-to-long term holding.

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