Rising Gasoline Prices Bode Well for Chinese Energy Companies

Robert Hsu, June 02, 2009

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There's no denying that oil prices are on the move back up. All year, I've been projecting that crude oil per barrel would trade back up around $70. And now that summer is nearly upon us, that's exactly where oil prices are headed. Currently, crude per barrel is around $68.

You know what that means… Higher prices at the pump. We've already experienced this in recent weeks. After watching crude oil per barrel drop from a high of $147 last July to nearly $30 at the end of 2008, gas prices at the pump also dropped dramatically. For the better part of 2009, Americans have filled up there tanks for around $2 per gallon. But now, prices are back around $2.50 per gallon.

And Americans aren't alone. Just yesterday, China's National Development and Reform Commission (NDRC) raised gasoline and diesel prices in the country. This is the third adjustment in prices this year. Retail prices for gasoline were lifted 7%, while diesel increased by 8%. This is equal to 290 yuan per tonne and 180 yuan per tonne, respectively.

The move by China's NDRC came in response to rising crude oil prices around the globe and rising demand in the country as China's economy is recovering nicely. To keep up with rising demand, two of China's state-owned enterprises are boosting production -- which, overall, bodes well for the companies' business. Let's take a closer look at one of these companies -- the largest oil refiner in Asia.

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Rising Gasoline Prices Bode Well for Chinese Energy Companies

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