Sinopec expects fuel glut to continue in 2010

China’s largest refiner, Sinopec, expects fuel demand in the country to continue to lag behind processing capacity in 2010, particularly as new refineries come on stream and as independent refineries expand output. According to Sinopec, although China’s apparent oil demand is likely to continue rising due to a rebound in the domestic economy, local refiners will have high incentives to produce, so the situation of oversupply in the refined oil products market and retail prices lagging behind the official ceiling will be very hard to rectify. Nevertheless, the company plans to boost its share of the fuel oil and kerosene markets in 2010 and step up domestic refining capacity by between 12 and 15 million tons per annum over the next few years. (December 24, 2009)