by Staff Writers
Shanghai (AFP) Sept 11, 2012
China on Tuesday hiked government-set fuel prices for the second month in a row with shares in listed oil giants falling despite expectations the move would narrow their losses.
State planner the National Development and Reform Commission said late Monday it would raise retail prices for petrol and diesel.
The benchmark price for petrol rose 6.6 percent to 8,840 yuan ($1,403) per tonne and diesel rose 7.2 percent to 8,020 yuan per tonne, according to a statement.
Shares in Chinese oil giants Sinopec and PetroChina were down in Shanghai trading on Tuesday despite hopes the move would pare losses in their refining business.
The companies say low government-set retail prices combined with high crude costs are hurting their business.
Sinopec recorded a loss of 18.5 billion yuan for its refining business alone in the first half of this year, while PetroChina reported a refining loss of 23.3 billion yuan in the period, according to company statements.
Sinopec shares were down 1.29 percent to 6.14 yuan while PetroChina was down 0.67 percent to 8.93 yuan around midday in Shanghai trading.
They were mixed in Hong Kong, where both companies are also listed, with Sinopec down 0.56 percent to HK$ 7.04 ($0.91) and PetroChina up 0.96 percent to HK$9.46 by midday.
The latest hike reflected changes in international crude prices, which have climbed due to hopes for a fresh round of economic stimulus policies by the United States and Europe, the commission said.
The commission can adjust fuel prices when international oil prices move by more than four percent over a 22-working day period. China last hiked fuel prices on August 10.
Oil prices steady on eve of Fed meeting, key eurozone events
Brent North Sea crude for delivery in October dipped one cent to $114.80 a barrel in late London deals.
New York's main contract, light sweet crude for delivery in October gained 33 cents to $96.87 a barrel.
"Crude is consolidating in the recent range with a modest pullback in the dollar offering a modicum of support as markets remain in 'wait and see' mode ahead of tomorrow's Dutch elections and ESM vote and Thursday's Fed decision," said Sucden Financial Research analyst Jack Pollard.
In Germany, a court is due to rule on Wednesday on the constitutional legality of Berlin taking part in the European Stability Mechanism (ESM) rescue fund to support debt-plagued eurozone countries.
The same day, the Netherlands votes to elect a new parliament for the second time in two years after a tight race dominated by economic uncertainty thanks to Europe's seemingly endless debt crisis.
Latest opinion polls give both current Prime Minister Mark Rutte's VVD and the Labour Party (PvdA), led by former Greenpeace activist Diederik Samsom, 35 seats in the 150-seat lower house.
With political horse-trading already starting behind the scenes, analysts predicted that the Netherlands was likely to see a centrist coalition government emerge, remaining pro-European Union -- in the short term at least.
Dealers were also waiting to see if Fed chief Ben Bernanke would on Thursday unveil a third round of bond-buying, or quantitative easing, to kickstart the US economy, which has seen a stuttering recovery from the global downturn.
The Fed on Monday said US consumer credit fell in July after 10 months of gains, raising concerns about economic confidence while unemployment remains high in the world's largest economy and oil consumer.
OPEC on Tuesday tweaked slightly higher its 2012 oil demand forecast following a small increase in US consumption and a "drastic" rise in Indian demand after July's huge power blackout.
The Organization of Petroleum Exporting Countries predicted in its new monthly report 2012 world oil demand of 88.74 million barrels per day (mbpd), up from the previous estimate of 88.72 mbpd, and higher than 87.89 mbpd in 2011.
"World economic turbulence did not slow oil consumption seasonality from its summer trend," OPEC said. "Not only did US oil consumption grow slightly, but Indian oil demand grew drastically."
Powering The World in the 21st Century at Energy-Daily.com
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Nationalized YPF draws Russian investor
Buenos Aires (UPI) Sep 7, 2012
Argentina's nationalized YPF energy company is pursuing talks with Russia's Gazprom to forge a partnership and secure needed cash investment in the company. Argentina nationalized YPF in May, alleging its principal shareholder Repsol of Spain wasn't reinvesting enough earnings in the company, affecting its performance and output. The state takeover has created tensions in Argentina's ti ... read more
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