China National Petroleum Corporation (CNPC) has become a focal point for stock market enthusiasts and investors, echoing the sentiment of many long-term investors who often joke about the curse of holding onto the company’s sharesAs of today, CNPC's stock price experienced a remarkable surge, climbing over 5.5% within a single trading day, which was nothing short of extraordinary given the historical context of its market performanceTo put this achievement into perspective, this was CNPC's most significant upswing in nearly a year, illustrating the rarity of such fluctuations in its long-standing, stagnant trading history.

Since its initial public offering (IPO) in 2007, CNPC's stock has faced considerable headwindsOn its first day of trading, the stock price peaked at an impressive 48.6 yuan per share, marking a pinnacle that many investors felt they would soon revisit—only to be met with disillusionment

Over the years, many stockholders have felt trapped by their investments in CNPC as the price has sagged to a mere 5.16 yuan per shareIt’s been a classic case of "holding the bag" in the investment world, exemplified even further by the well-known quip among investors: "How much sorrow can one bear? It is symbolized by the holdings of CNPC!"

The dismal trajectory of CNPC's stock price over the years was starkly highlighted during economic upswingsEven the monumental economic stimulus packages introduced in 2008 failed to elevate the stockRemarkably, even as broader market indices enjoyed various bull runs, CNPC remained firmly bogged down, leading many to wonder if the company had somehow been cursed by the stock gods.

However, the recent uptick in CNPC's stock price can be traced back to a broader trend in international oil prices, which have seen substantial recovery following a period of drastic decline amidst a global pandemic

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A closer look at the history of oil prices reveals how they fell sharply last April, dipping below $20 per barrel, a crisis moment for the global oil marketIn the wake of cutting production quotas by major oil-exporting nations, the market began to stabilize, and then flourish, particularly as economies began to rebound starting in late 2020.

A critical factor influencing the current price increase is that Brent crude oil is now priced above $70 a barrel, showcasing a significant recovery compared to the pre-pandemic levels that hovered around $60 or $70. Moreover, as developed nations roll out vaccines and economies recover, demand for oil is surging, thereby providing additional support for oil pricesAnalysts at Goldman Sachs have similarly projected the per-barrel price to reach as high as $80, reinforcing market optimism surrounding CNPC.

Adding to this positive outlook are CNPC's improving financial results, as the company benefited directly from rising oil prices

In recent evaluations, it was clear that CNPC's operational dynamics differ strikingly from many of its competitors, such as Sinopec, whose focus largely rests on refining and sales rather than extractionOil prices' surge has positively impacted CNPC’s profitability significantly, recovering from a staggering loss of 16.2 billion yuan in the first quarter of the previous year to posting a profit of 27.7 billion yuan in the same quarter this year—the best quarterly performance since 2015.

Yet, fluctuation in oil prices does not stem purely from the dynamics of supply and demandIt is essential to recognize an underlying economic context at play, characterized by the rampant printing of the U.Sdollar in response to the pandemicThe U.Sgovernment undertook unprecedented measures to stimulate its economy, a means by which dollar liquidity flooded the marketsNot only did this serve to boost the stock market to record heights, but it also invigorated commodity prices, leading to considerable price increases across various sectors.

U.S

inflation rates have also made headlines lately, sparking concern among economists and consumers alikeThe Consumer Price Index (CPI) climbed to a surprising 4.2% in April, with May numbers presumably trending higher, grappling with burgeoning inflation reminiscent of the highs not seen since before the 2008 crisisThe core Producer Price Index (PPI) reflected this inflationary pressure with a reported rate of 4.1%, the highest since 2008—a stark reminder of prior economic turbulence.

This cyclical nature of economies and markets reflects the ever-repeating patterns of boom and bustJust over a year ago, oil prices were in freefall, raising alarms worldwide about the sustainability of energy marketsFast-forward to today, and oil prices have not only rebounded but reached heights surpassing pre-pandemic levels—as many commodities are also on a steep upward trajectory.

Thus, the saga of CNPC encapsulates the paradoxes and peculiarities of the stock market