Jet accounts for only about 4 percent of China's oildemand whereas gasoline and diesel make up

Jet accounts for only about 4 percent of China's oildemand, whereas gasoline and diesel make up more than half. The jump in jet fuel, the second in as many months, will notbe welcome to airlines such as China Eastern (0670.HK) and ChinaSouthern (1055.HK), which have already had to overcome a globalflu outbreak this year as well as the economic downturn. But the price-setters in Beijing will be pleased to haveachieved surprise on this occasion. Under Beijing's price-setting formula, fuel prices shouldtrack a 22-day moving average of crude oil, giving speculatorsplenty of time to hoard fuel before the next likely price move. Last time, the government, which had aborted a planned risein early May, let Chinese fuel prices get so far behind a surgein crude that it was left with a dilemma: raise prices and handa windfall to speculators, or abandon its new pricing system It eventually opted for a low rise on June 1. The latest increase, coming hard on the heels of that one,gave the rumour mill little time to gather steam. "I don't think it should be a shock, but given the delaysbefore, this timely move will surprise the market," Gordon Kwan,head of energy research at Mirae Asset Securities, said earlierafter an industry source and a website said a rise was imminent "It is earlier than expected given their previous delay.

Butit should be positive news for the oil sector." For a related table, please see [ID:nPEK152256] STIFLING DEMAND For oil traders, one concern will be whether the highestprices ever paid by Chinese motorists, taxi drivers andtransport companies will stifle demand that has only recentlybegun to return to growth after months of decline. The higher motor fuel prices will give Sinopec andPetroChina an incentive to stem massive exports of gasoline anddiesel, but may also put the brakes on China's drivers, who havebeen buying cars in record numbers this year. That chimes with the original aim of the fuel pricingsystem, to discourage waste. China is increasingly reliant onimported oil, a habit that began to get out of hand a year ago,when Chinese pump prices were far below record crude oil prices.

China's politicians are keen to revive economic growth butare wary of a fuel binge caused by pump prices that are out ofline with the wider market. Crude oil prices that have rebounded from February lows near$30 a barrel were not moved by news of higher costs being passedon to Chinese consumers Benchmark U.S. light, sweet crudeCLc1 was up $1.88 a barrel to $71.04 at 1654 GMT, on concernsover Nigerian supply. [O/R] ($1=6.833 Yuan) (Editing by Anthony Barker) Stocks China. * Oil rises, lifts energy stocks * Home builders' shares rise after KB Home's upgrade * Dow up 0.9 pct, S&P 500 up 0.8 pct, Nasdaq up 0.7 pct * For up-to-the-minute market news click [STXNEWS/US] (Updates to midday, changes byline) By Rodrigo Campos NEW YORK, June 29 (Reuters) - U.S.

stocks rose on Mondayas higher oil prices boosted energy shares, and signs of lifein overseas markets renewed investor optimism about theprospects for an economic recovery. Crude oil futures CLc1 jumped more than 3 percent toabove $71 per barrel after Nigerian militants said theyattacked the country's infrastructure, raising supply concernsthat helped offset lackluster demand reflected in U.S.government data. Oil prices also got a lift as improvedsentiment about the U.S. economy drove stocks higher andincreased hopes for growth in energy demand. (For story,please see [ID:nN29428239] Energy shares gained, with Exxon Mobil Corp (XOM.N) up 1.9percent at $70.35, and Occidental Petroleum (OXY.N) up 1.9percent at $65.52. Shanghai stocks .SSEC reached a one-year closing highfor the fourth straight session as signs of a Chinese economicrecovery and ample liquidity boosted the market, bolsteringinvestor sentiment.

"On a very short-term basis, the American investor istaking comfort from international markets, which have haddecent activity," said Joseph Battipaglia, market strategistat Stifel Nicolaus in Yardley, Pennsylvania. "The commodities trade is obviously still on, with oilprices breaking through $70 again." The Dow Jones industrial average .DJI gained 78.29points, or 0.93 percent, to 8,516.68. This press release does not constitute or form a part of any offer orsolicitation to purchase or subscribe for securities in the United States. Any person other than a Qualified Person may not act or relyon this press release or any provision thereof.This press release is not a prospectus which has been approved by the FinancialServices Authority or any other United Kingdom regulatory authority for thepurposes of Section 85 of the Financial Services and Markets Act 2000.With respect to the United States of America, this press release may not bepublished, distributed or transmitted in the United States (including itsterritories and dependencies, any state of the United States and the district ofColumbia). The offer has been made to thepublic exclusively in France.With respect to the member States of the European Economic Area, other thanFrance, which have implemented the Prospectus Directive (each, a "relevantmember State"), no action has been undertaken or will be undertaken to make anoffer to the public of the Bonds requiring a publication of a prospectus in anyrelevant member State. The Bonds and new or existing shares received upon conversion orexchange of the Bonds (the "Securities") are intended only for QualifiedPersons, and no invitation, offer or agreements to subscribe, purchase orotherwise acquire such Securities may be proposed or concluded other than withQualified Persons.