China Daily Oil Summary: China’s Road Fuel Prices Could Soften in Oct

China’s gasoline and gasoil prices are expected to see pressure from flatlining demand and bearish market sentiment, according to OilChem.

• China’s gasoline production is expected to fall by 1.82% in October when compared to September levels, totalling 15.1m mt. This is due to lower production at state-owned refineries. Meanwhile, Chinese gasoline demand is forecast to be 15.85m mt, with OilChem thus predicting a lower-than-expected supply deficit of 0.75m mt.
• Saudi Aramco is in discussions on acquiring a 10% stake in Shandong Yulong Petrochemical, according to Bloomberg. Shandong Yulong is currently completing the construction of a refining and petchem facility which will process 400k b/d of crude oil, producing derivatives and petrochemicals.
• YUAN: The currency weakened to 7.2980 against the dollar from 7.2930 on Tuesday. The PBOC set the dollar-yuan central parity rate lower at 7.1779, compared with 7.1781 set on Tuesday. The fixing was estimated at 7.2841 by Bloomberg survey today.
• EXCLUSIVE: China will continue to face economic headwinds this year as consumption remains soft, the property sector fails to rebound and monetary and fiscal easing remains limited in its scope despite market positioning for further accommodative policies, economists and advisors told MNI.
• LIQUIDITY: The People's Bank of China (PBOC) conducted CNY102 billion via 7-day reverse repo on Wednesday, with the rate unchanged at 1.80%.