By Wang Ying
Dec. 1 (Bloomberg) -- China Petroleum & Chemical Corp., Asia’s largest refiner, fell the most in more than a week after Goldman Sachs Group Inc. cut its recommendations on the stock because of weaker Chinese demand and a potential fuel-price cut.
The shares of Sinopec, as China Petroleum is known, declined by 2.5 percent in Hong Kong to close at HK$5.02, the biggest drop since Nov. 20. The stock has fallen 57 percent this year, compared with a 49 percent decline in the benchmark Hang Seng Index.
Sinopec had its stock removed from Goldman’s “conviction buy” list and its rating cut to “neutral,” analysts Kelvin Koh and Chris Shiu said in a report today.
“We believe there is downside risk to our China oil demand forecast of 3.5 percent for 2009 as demand has decelerated and inventories appear to be rising especially for gasoline and diesel,” the Goldman analysts wrote. Sinopec may reduce its refineries’ operational rate to 83 percent next year as demand wanes, they wrote.
The Chinese government may lower domestic gasoline and diesel prices by early 2009, according to Koh and Shiu.
To contact the reporter on this story: Wang Ying in Beijing at ywang30@bloomberg.net.
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