Mirae Asset Global ResearchSee the last page of this report for important disclosuresLatest sector insightsThe global energy sector is traditionally among the outperforming sectors in any Santa Claus rally. Robust U.S. economic stats, plunging fuel supplies, and China's diesel famine should help oil prices march toward USD90/bbl ahead of the December OPEC cartel meeting, especially if the greenback resumes its downtrend. This could translate to positive earnings surprises for CNOOC and COSL. Strong Asian economies also support healthy downstream margins for SK Energy, Hanwha Chemical, LG Chemical, and Petronas chemicals. Kogas and Kepco are also value-safe haven buys amid tension over Korea. Regulatory uncertainties are fully reflected in the valuations of PetroChina, Sinopec and Oil India. Refined ProductsA cheaper bunker-C price could widen the crack spread while simple and complex margins remain. The Singapore crack spread increased USD2.9/bbl compared to a month ago. Refined products decreased 1.3m/bbl, mostly from middle distillate, bunker-C, and propane. Gasoline inventory increased 1.9m/bbl due to a utilization rate increase by 1.5%ppt to 85.5%ppt. PetrochemicalThe downstream petrochemical product spread decreased last week with the exception of the synthetic fiber chain. The Para-Xylene, MEG, TPA and caprolactam spreads increased this week. As the natural rubber price increased to a record high, synthetic rubber prices for SBR and BR, for example, also increased. Latest sector insightsThe global energy sector is traditionally among the outperforming sectors in any Santa Claus rally. Robust U.S. economic stats, plunging fuel supplies, and China's diesel famine should help oil prices march toward USD90/bbl ahead of the December OPEC cartel meeting, especially if the greenback resumes its downtrend. This could translate to positive earnings surprises for CNOOC and COSL. Strong Asian economies also support healthy downstream margins for SK Energy, Hanwha Chemical, LG Chemical, and Petronas chemicals. Kogas and Kepco are also value-safe haven buys amid tension over Korea. Regulatory uncertainties are fully reflected in the valuations of PetroChina, Sinopec and Oil India.Refined ProductsA cheaper bunker-C price could widen the crack spread while simple and complex margins remain. The Singapore crack spread increased USD2.9/bbl compared to a month ago. Refined products decreased 1.3m/bbl, mostly from middle distillate, bunker-C, and propane. Gasoline inventory increased 1.9m/bbl due to a utilization rate increase by 1.5%ppt to 85.5%ppt.PetrochemicalThe downstream petrochemical product spread decreased last week with the exception of the synthetic fiber chain. The Para-Xylene, MEG, TPA and caprolactam spreads increased this week. As the natural rubber price increased to a record high, synthetic rubber prices for SBR and BR, for example, also increased. Oil & Gas/Energy UpdateOverweightAsia-Pacific Petro Patrol 26 Nov 2010WEEKLYGordon KwanHead of Regional Energy+852 3653 8646gordon.kwan@miraeasset.hkJae-Chul ParkAnalystChemical/Refinery+822 3774 6896parkjc@miraeasset.comRicky NgAnalystGas utilities+ 852-3653-8634ricky.ng@miraeasset.comNipun SharmaIndia Oil AnalystRegional Energy+852 3653 8624nipun.sharma@miraeasset.hkMirae energy team ideasCompany RecPrice (25 Nov)Target priceChinaPetroChina (857)BUYHKD9.52HKD12.0Sinopec (386)BUY*HKD7.37HKD7.25CNOOC (883)BUYHKD17. 06HKD20.0COSL (2883)BUYHKD14.06HKD16.0ENN Energy (2688)BUY*HKD24.50HKD23.0China Gas (384)BUYHKD4.47HKD4.80KoreaLG Chem (051910)*BUYKRW394,500KRW410,000Hanhwa Chem(009830)BUYKRW33,050KRW41,000Cheil Ind (001300)BUYKRW109,000KRW117,000Kolon Ind (120110)BUYKRW64,500KRW82,000Kogas (036460)BUYKRW45,100KRW57,000IndiaOil India (OINL)BUYINR1,405.5INR1,670Source: Bloomberg, Mirae Research estimates* TP and rating are under review.In Oil We Trust 2010 Asia Pacific Oil & Gas/PetrochemicalMirae Asset Global Research2ContentsNews & comments 2Petroleum margins by product 4AP peer valuation overview 5U.S. petroleum inventory overview 7Commodity futures trading 9Singapore’s B/C oil inventory 10Prices by major product 11Margins by major product 12Korea import/export trends 15China import/export trends 16China petrochemical production statistics 17Performances 18 2010 Asia Pacific Oil & Gas/PetrochemicalMirae Asset Global Research3News & commentsCompanyNews flowAnalyst commentsKOGAS 036460 KS, BUY TP: KRW57,000Russian LPG supplier Primorsk Gas signed a preliminary agreement with Kogas in October for the modernization of the Russian company’s LPG processing, storage and transportation capacity.Although it is a preliminary agreement, we think it shows Kogas’ intent to diversify into a variety of overseas businesses. Apart from E&P businesses, other overseas ventures, such as gas plant modernization, could help lower the company’s overall risk exposure and could also serve as a future earnings driver, in our view. 2010 Asia Pacific Oil & Gas/PetrochemicalMirae Asset G