Challenging conditions may continue, says Sinopec

China Petrochemical Corp (Sinopec Group), Asia's largest refiner, expects business conditions to stay challenging next year as crude oil prices rise while fuel demand growth lags behind expansion in processing capacity.

The domestic oil-product market will be oversupplied next year when new refining facilities come on-stream and independent plants increase output, said President Su Shulin in an online newsletter yesterday.

Oil companies are expanding refining capacity to meet industrial demand spurred by the government's economic stimulus and to benefit from a fuel-pricing system introduced last year that ensures a profit.