Singapore Petroleum Co

Singapore Petroleum Co still in underlying downtrend (since mid-Jul) as 3Q traditionally weak for oil refiners. Merrill Lynch, which has Buy call with $10.00 target, says unprecedented slowdown in China's fuel consumption during Olympic Games, weakness in US economy, recent pullback in oil prices likely to keep share price subdued in near term. But expects SPC to benefit as pent-up demand in China post-Games likely to cause "positive shockwave" to gross refining margins. Adds partial supply shutdown in Europe in 4Q08 to prepare for launch of Euro V fuel specifications in Jan '09, partial capacity shutdown in Asia from Sep-Nov will also help SPC's margins.