S.Korea’s S-Oil sees Q2 refining margins staying firm on seasonal demand
South Korea’s S-Oil Corp said on Wednesday that its first quarter profit doubled on a year earlier while it expected regional refining margins in the second quarter to stay firm, supported by seasonal demand and easing pandemic restrictions.
S-Oil is the country’s third-largest refiner. Its main shareholder is Saudi Aramco
S-Oil reported an operating profit of 1.3 trillion won for the first quarter, up 112% from the year-ago period.
The company said it operated the crude distillation units at its 669,000 barrels-per-day refinery in the southeastern city of Ulsan at 99.6% of capacity on average in the January-March period, up from 98.7% in the fourth quarter.
Shares of S-Oil were up 2.4% in morning trade, while the wider market was down 1.3%.
The gasoline refining margin would improve this month and in the driving season of the northern hemisphere summer, S-Oil said.
Analysts said refining margins are likely to improve in the second quarter as global oil supplies are seen tight due to Western sanctions on Russia over its invasion of Ukraine.
Aviation fuel demand is also expected to recover as more countries gradually reopen their borders and further ease travel restrictions.
The approaching peak summer demand and tight fuel supplies are expected to support refiners’ profits globally.
Refining margins in Singapore, bellwether for profits at export-oriented refineries in Asia, hit an all-time high of $19.12 a barrel in April as Western sanctions hit Russian supplies while global oil inventories are at multi-year lows.
Source: Reuters (Reporting by Byungwook Kim and Heekyong Yang; Editing by Jacqueline Wong, Muralikumar Anantharaman and Bradley Perrett)