Upstream pricing – what goes up may come down: China’s big three oil & gas  majors have outperformed the HSI by 8-32% YTD, mainly because of higher oil  prices. While we cannot rule out further crude price rises, reflecting an additional risk  premium for heightened geopolitical tensions, our Global Oil & Gas research team  sees oil price risk to the downside over time – the latest forecasts are USD84/b in  2022e and USD76.50/b in 2023e (Oil things considered, 25 February 2022). Given  the price cap policy on oil products in China, we see marginal returns diminishing for  upstream companies, while risk could be on the downside as demand-supply  recalibrates over time. We downgrade Sinopec-H/A (386 HK/600028 CH) to Hold,  given thin downstream margins due to gasoline and diesel price regulations and  elevated chemical feedstock cost. We still like CNOOC (883 HK, Buy) for supporting  shareholders’ returns through buyback programmes, an enhanced dividend policy,  and a potential A-share listing unlocking value