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Commodities

'Teapot' oil refinery consolidation in China may spawn a tempest

Realignment seen driving down Asian petroleum product prices further

A CNOOC refinery in China's Guangdong Province: Competition between state-owned and private refiners looks set to intensify.   © Reuters

TOKYO -- A looming consolidation of China's independent oil refineries, known as "teapots," is raising fears of an export surge that could hit already sagging Asian prices.

Seven out of nearly 30 teapots concentrated mainly in the eastern province of Shandong are expected to be melded into one group, according to a local report published in early September. The long-term goal, the report said, is to develop a single competitive brand and increase the number of gas stations.

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