China's blue-chip CSI 300 Index made modest gains in the past week thanks to the huge electrification campaign that reduces the country's exposure to the volatile oil price as the continuing conflict in the Middle East enters the second week, said an analyst on Friday.
Chinese stocks closed lower on Friday, with the benchmark Shanghai Composite Index down 0.81 percent to 4,095.45 points.
Timothy Pope, a market analyst for China Global Television Network, said the CSI 300 Index made modest gains despite a rough week for both Chinese and global stock markets.
"The conflict in the Middle East really shows no sign of winding down and it has been as you said another rough week for the global markets. Today the Shanghai Composite Index closed down 0.8 percent, and ended lower for the week as well, but the blue-chip CSI 300 Index actually managed to make some modest gains this week. And that fits what we've been hearing from analysts and investment banks, including Morgan Stanley and UBS. They've said that China's got less oil exposure than other economies. This is partly because of the huge electrification campaign which has been happening in China from family cars to road haulage, and also just the total energy mix here. But we know that oil isn't the only thing that's not getting out of the Middle East at the moment. Fertilizer has emerged as another big disruption point and we have seen in the last 48 hours China already begin early releases of fertilizer reserves ahead of the spring planting season. With all that in the mix we have seen the likes of Morgan Stanley and UBS touting A-shares as a diversification option and a resilient market in this risk-off investment environment," said Pope.
"Sector-wise today we saw some consumer stocks rising -- led by liquor makers, in particular, Kweichow Moutai. There were also some limited gains for Chinese real estate and financial firms. But with the oil price still extremely volatile, Chinese resources and energy shares pulled back today to become the two worst-performing sectors," said Pope.
Chinese blue-chip stocks make gains amid a rough week for global markets: analyst
The United Arab Emirates (UAE) has withdrawn from the Organization of the Petroleum Exporting Countries (OPEC) to secure its greater crude oil pricing autonomy and show its dissatisfaction with neighboring Arab states over their failure to condemn Iran's attacks on it, a Chinese expert on the Middle East said.
On Tuesday, the UAE announced it would withdraw from OPEC and the broader OPEC+ alliance, effective May 1. The move removes the bloc's third-largest oil producer and further weakens its influence over global oil supplies and prices.
In an interview with China Central Television (CCTV), Wang Jin, director of the Center for Strategic Studies at Northwest University in China, noted that disagreements over global energy pricing between the UAE and other OPEC members prompted the exit, as the country seeks greater autonomy over its crude oil exports.
"There are divergent views between the UAE and members of the OPEC or the broader OPEC+ alliance regarding international energy pricing. According to Saudi Arabian assessments, a price range of 80 to 90 U.S. dollars per barrel aligns with their national interests. However, the UAE tends to believe that a price of around 50 U.S. dollars per barrel is sufficient to meet its essential economic needs. Consequently, the UAE seeks to exit these mechanisms to gain more leverage over pricing and bolster its autonomy in global oil exports," Wang said.
Beyond economic disputes, Wang noted that the decision also stems from the UAE's dissatisfaction with regional neighbors, who failed to provide sufficient support to the UAE -- the most targeted Gulf nation by Iranian strikes -- during the recent tensions in the Middle East.
"The UAE harbors deep dissatisfaction with current regional policies. After the United States and Israel launched military strikes against Iran, the UAE has, in fact, been the most targeted Gulf nation by Iranian attacks. From the UAE's perspective, neighboring Arab states including Saudi Arabia and Qatar, have failed to offer sufficient support for it or issue more vocal condemnations of Iran's actions. This lack of support has fueled the UAE's significant resentment. Furthermore, as Iran itself is a member of both OPEC and OPEC+ alliance, the UAE is inclined to use its withdrawal from these mechanisms to demonstrate dissatisfaction over the regional status quo," he said.
UAE quits OPEC for pricing autonomy amid regional tensions: Chinese expert
