Chinese traders of MTBE buoyed in anticipation of rise in retail gasoline

It is likely that Beijing will raise retail gasoline and diesel fuel prices in the face of higher prices for crude oil. Chinese traders of methyl tertiary butyl ether (MTBE) expect that prices of MTBE will follow suit. One Chinese trader stated, “MTBE prices in China are on an upward trajectory in anticipation of a move by Beijing to raise retail gasoline prices. The market is basically tracking the current strength in crude oil.” Adjustments in the price at the pump are made in China by tracking changes on a 22-work day average price of a basket of international crude oil. It is necessary for there to be at least a 4% increase in the cost of crude to justify an adjustment. (February 21, 2011)