Sinopec hits 3-wk high as China raises fuel prices

HONG KONG, Nov 10 - Shares in Sinopec Corp, <0386.HK>, Asia's top oil refiner, rose as much as 2.6 percent to a three-week high on Tuesday after China raised fuel prices, boosting the profit outlook for the country's refiners.

China will lift gasoline and diesel prices by around 7 percent from Tuesday to reflect the rising cost of crude oil, taking pump prices to their highest ever, China's top planning body, the National Development and Reform Commission, said on Monday. [ID:nPEK221762].

Analysts had warned that Sinopec <600028.SS> <SNP.N> --- whose third-quarter net profit more than doubled --- could struggle to repeat the profit surge in the next quarter, with crude prices hovering near $80 per barrel and Beijing's two recent fuel price cuts.

Beijing's latest fuel price hike is expected to bring Sinopec's loss-making refining division back into profit in November, Bank of America-Merrill Lynch analyst Thomas Wong said in a note on Tuesday.

By 0230 GMT, Sinopec rose 0.9 percent to HK$6.88, while top Asian oil and gas producer PetroChina <0857.HK> <601857.SS> <PTR.N>, China's No. 2 refiner, gained 2 percent to a two-week high of HK$10.24.

Sinopec's refining margins could touch $7.20 a barrel in November, according to Citigroup analyst Graham Cunningham.

Sinopec said in late October that its refining margins fell by nearly half in the third quarter to $5.20 a barrel, but forecast "normal growth" as it banks on China to provide relief by raising fuel prices. [ID:nHKG40846].