PetroChina, Sinopec Advance on Speculation China May Increase Fuel Prices
China’s biggest refiners, including PetroChina Co., rose by their daily limit in Shanghai trading as crude climbed to a two-year high, prompting speculation the government will raise fuel prices for the third time this year.
PetroChina and China Petroleum & Chemical Corp., known as Sinopec, earlier jumped as much as 10 percent, outpacing gains in the benchmark Shanghai Composite Index.
China last increased fuel prices by 3 percent on Oct. 26 under a mechanism that allows the government to revise gasoline and diesel prices when crude costs change more than 4 percent over 22 working days. Crude futures in New York have risen 7.2 percent since last month’s adjustment.
“Oil prices are the primary reason supporting the shares today,” Yin Xiaodong, an analyst with Beijing-based Citic Securities Co., said by telephone today. “Some investors are speculating that domestic retail fuel prices will be raised if crude continues to rise.”
Crude in New York rose as much as 0.8 percent to $88.55 a barrel in electronic trading on the New York Mercantile Exchange, the highest since Oct. 9, 2008. Futures were at $88.41 a barrel at 4:11 p.m. Singapore time.
Oil has rallied 12 percent in 2010 as depleting fuel stockpiles in the U.S., the world’s largest crude consumer, signaling a recovery in demand.
PetroChina rose 7.7 percent to close at 12.74 yuan, the most since Sept. 22, 2008. Sinopec gained 5.2 percent to 9.49 yuan, the biggest advance since Dec. 14. The benchmark index climbed 1 percent.
Record Processing
China’s crude oil processing volume rose to a record last month after refiners increased production to ease a domestic fuel shortage, the China Mainland Marketing Research Co., which compiles data for the National Bureau of Statistics, said today.
“The diesel shortage and stronger processing data add to the positive sentiment for Sinopec and PetroChina,” Yin said.
Sinopec, the nation’s largest refiner, increased production to a record in October, parent China Petrochemical Corp. said on Nov. 4.
--Wang Ying and Chua Kongho. Editors: Ryan Woo, Aaron Sheldrick.
To contact the Bloomberg staff on this story: Ying Wang in Beijing at ywang30@bloomberg.net; Chua Kong Ho in Shanghai at kchua6@bloomberg.net
To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net; Darren Boey at dboey@bloomberg.net.
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