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China's top refiner, Sinopec's stock gained 0.2 yuan ($0.03) to close at 6.09 yuan on the Shanghai Stock Exchange after rising at one point to 6.19 yuan.
Shares in PetroChina also rose 1.35 percent on the exchange, closing at 11.23 yuan, peaking at one point at 11.56 yuan.
Analysts said the stock rises had been sparked by a report in The Wall Street Journal, which reported that China's leadership was studying the feasibility of merging the nation's largest oil companies in an effort to "take on the likes of Exxon".
It said one permutation was a merger of Sinopec and China National Petroleum Corp, the parent company of PetroChina.
Another was to combine China National Offshore Oil Corp and SinoChem Group.
However, none of the four companies confirmed the report. Lyu Dapeng, a spokesman for Sinopec, also refused to comment on the report.
One anonymous industry source suggested the rumors may have come from the State-owned Assets Supervision and Administration Commission, which is currently working on the reform and restructuring of Chinese State-owned companies in an effort to raise efficiency and competitiveness. However, no deal had been finalized, the source said.
Jefferies Hong Kong Ltd, a US-based global securities and investment banking group, said it was the first time it had heard of the proposed merger plan.
"We believe this is more 'brainstorming' and 'thinking outside of the box' than a feasible proposal," Jefferies said in a statement.
It conceded there was some logic to a CNOOC and SinoChem merger but that a combined CNPC and Sinopec would be a monopolistic monster twice the size of Exxon and, as such, could effectively "die on the vine", as the company put it.
Jefferies said CNPC is already bigger than Exxon in terms of production, proven reserves and pipeline assets. In addition, Sinopec's upstream assets are already considered large enough, having acquired around 40 billion yuan of overseas assets over the last five years. It already produces around 47 percent of China's refined products.
In such circumstances, "creating an even larger, more monopolistic national oil company would be a grave mistake", Jefferies said.
A merger between CNOOC and SinoChem would create a fully integrated upstream-downstream company. Li Li, research and strategy director at ICIS-C1 Energy, a consultancy in Shanghai, said a merger strategy could certainly help cut costs and streamline operations during the ongoing crisis in global crude oil prices, but that such a super-size merger would be very difficult to achieve.
"The idea might be to increase efficiency of the two national oil companies, but that would not happen if they had no competitors in the domestic market," she said.
Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, said any merger might be beneficial for the Chinese companies on the overseas market, but domestically the opposite is more beneficial, with further competition needed.
