china increased crude oil imports 26%

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    SINGAPORE (Dow Jones)--The decision by the Organization of Petroleum
    Exporting Countries to cut output isn't likely to diminish China's large
    appetite for crude imports, at least for this year, even though it will push up
    crude prices, China-based trading executives said Thursday.

    "The price may tick up a bit, not to the extent that it will slow China's
    crude buying (from international markets)" said a trading executive with a
    state trading house.

    Another trading executive said higher crude prices would raise the cost of
    China's crude imports, consequently hurting margins at refineries, especially
    those owned by China Petroleum & Chemical Corp. (SNP), or Sinopec.

    Sinopec is China's largest refiner, relying on imports to supply about 45% of
    its crude.

    China relies heavily on crude imports as its domestic production is leveling

    Imports have been rising sharply this year thanks to good demand for oil
    products from the transportation sector. In the first eight months, crude
    imports rose 26% from a year earlier to 57.42 million tons, according to data
    released by Chinese customs.

    The second executive added that higher crude prices is good news for
    PetroChina Co. (PTR), China's largest crude producer.

    PetroChina produces about 108 million tons of crude a year, but needs only
    about 85 million tons for its refining needs. It exports or sells the rest to
    refineries owned by Sinopec at international prices.

    Benchmark crude prices have already jumped since OPEC announced Wednesday it
    would cut its output ceiling by 900,000 barrels a day to 24.5 million b/d,
    effective Nov. 1. Nymex crude futures rallied 4% during floor trade Wednesday
    to settle $1.11 higher at $28.24 a barrel.

    The first executive said OPEC cut output to keep prices well off the bottom
    of its target price band of $22-$28 because crude prices could fall in the near
    future due to increased output from non-OPEC countries.
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