(MarketWatch, Oct 31, 2006) China Petroleum & Chemical Corp. (SNP) is expected to import 120 million metric tons of crude oil this year, or an average 2.41 million barrels a day, Senior Vice-President Zhang Jianhua said Monday.

If achieved, the level of crude imports would be 21% higher than the 99.l3 million tons that the Chinese oil company - better known as Sinopec Corp. (SNP) - imported last year.

Zhang added that Sinopec's refining business would post a loss this year despite the recent fall in global crude oil prices.

High crude oil prices hurt Sinopec, which is Asia's largest refiner by capacity, because retail and wholesale oil product prices in its domestic market are limited by government-imposed caps.

In the first half of this year, its refining business recorded losses of CNY16.61 billion ($2.1 billion), widening from CNY1.30 billion in the year earlier period.
This followed refining losses of CNY12.9 billion that Sinopec posted in 2005, which were partly offset by a CNY9.42 billion subsidy from the government as compensation.

Although domestic oil product price limits were put up by the government in March and May, analysts think Sinopec's refining margins become negative whenever crude oil rises to above $60 a barrel on the global market.
Crude oil prices briefly dipped below the $60/bbl level when they fell more than 20% since hitting their mid-July peak.

At 1007 GMT, a barrel of West Texas Intermediate crude for front-month delivery was traded at $60.38/bbl.
source:MarketWatch