Bloomberg News

PetroChina, Sinopec Fall as Crude Futures Trade Near 4-Week Low

January 16, 2012

Jan. 16 (Bloomberg) -- PetroChina Co. and China Petroleum and Chemical Corp., the country’s biggest oil producers, fell in Hong Kong trading after crude dropped to the lowest in almost four weeks on concerns Europe’s debt crisis may curb demand.

PetroChina declined as much as 2.2 percent, the most since Dec. 15, and was at HK$10.78 at 10:22 a.m. local time, down 1.8 percent. Sinopec, as China Petroleum is known, dropped 1.4 percent to HK$8.81, while Cnooc Ltd. retreated 1.2 percent. The benchmark Hang Seng Index fell 1 percent.

Crude slid to $98.70 a barrel in New York on Jan. 13, the lowest close since Dec. 21, after Standard & Poor’s stripped France of its top credit rating and cut eight other euro-zone nations, prompting concerns energy demand may slow. The MSCI Asia Pacific Index sank 1.3 percent in Tokyo following a 2.2 percent gain last week.

“The overall market atmosphere turned negative after those European countries lost their top credit rating,” Shi Yan, a Shanghai-based analyst at UOB-Kay Hian Ltd., said by telephone. Sinopec may lead a rebound in oil shares when the market stabilizes, she said.

Sinopec has gained 14 percent in Hong Kong trading in the past year, while PetroChina has climbed 1.7 percent. Cnooc, the country’s largest offshore oil explorer, has declined 22 percent.

The unit of China Petrochemical Corp. signed an agreement with Saudi Arabian Oil Co. Jan. 14 to develop a refinery in Saudi Arabia, and the companies are in talks to build another in China, their second in the country.

Saudi Basic Industries Corp. and Sinopec signed a memorandum of understanding for the construction of a petrochemical plant in Tianjin, the official Saudi Arabia Press Agency reported Jan. 15.

Crude for February delivery was at $98.81 a barrel, up 0.1 percent, in electronic trading on the New York Mercantile Exchange at 10:21 a.m. Hong Kong time.

--Editors: Ryan Woo, Indranil Ghosh.

To contact the reporter on this story: Guo Aibing in Hong Kong at aguo10@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.


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