China National Petroleum Corp, the country's biggest oil and gas producer, said it would have difficulty meeting its profit target this year because of crude oil's slump this month. The state-run company, which also refines crude to produce fuels, expected oil prices to decline further this quarter, it said. Lower rates would reduce its earnings from oil sales and cut the value of its product inventories. The company said those stockpiles remained high. The view on the oil price in CNPC's statement echoes that of Nomura International Hong Kong, which said US-traded crude had the potential to drop below US$70 a barrel by the end of the year if the Organisation of Petroleum Exporting Countries failed to cut production. That would push prices to a level last seen in June 2010, and narrow refining margins in Asia as the value of stockpiles maintained by refiners decline. Falling prices could "crush Asian refiners' margins" if demand for oil remained weak, said Gordon Kwan, Nomura's Hong Kong-based head of regional oil and gas research. Oil demand growth in China, the world's second-biggest consumer, was expected this year to be the weakest since 1990 as economic growth slowed, Sanford C. Bernstein analyst Oswald Clint wrote in a report. The International Energy Agency has cut its global oil demand forecast further, saying growth this year would be the weakest since 2009. Lower demand is already narrowing refining margins across Asia. Profit from making diesel in Singapore, a regional benchmark, has averaged US$14.25 a barrel this month, compared with US$18.20 a barrel in January and US$16.53 a barrel in October last year, according to data from PVM Oil Associates in London. Brent crude in London, a benchmark for more than half the world's oil, has dropped 27 per cent since the beginning of July, the biggest four-month slump since 2008, when a financial meltdown drove it below US$40 a barrel. Some of the world's biggest banks are predicting the slump in prices may be near an end. CNPC is the parent firm of PetroChina. PetroChina met forecasts with a 4 per cent increase in profit in the first half ended June after it sold natural gas at higher prices, helping offset a 3.4 billion yuan (HK$4.3 billion) operating loss in its refining and chemicals businesses.