S.Korea's S-Oil Expects Strong Refining Margins for Next 2 Yrs
SEOUL, Oct 30 (Reuters) - South Korea's S-Oil corp said on Monday that profits from refining crude oil would stay strong for the next couple of years due to a tight outlook for supply.
Oil giant Saudi Aramco is the top shareholder in S-Oil, South Korea's third-largest refiner.
"Strong refining margins will be sustained for the next couple of years given a tight supply-demand balance outlook on the back of persistently slow capacity expansions," the refiner said in an earnings statement provided in English.
S-Oil reported a 553.2 billion won ($492.32 million) operating income in the third quarter of 2017, well over four-times the 116.2 billion won recorded a year ago. Operating income soared mainly on strong refining margins and a broad rise in oil prices, the refiner said.
In the aftermath of Hurricane Harvey, Asian refiners boosted their output to sell their products to the United States and reap profits from higher prices as the storm hit U.S. Gulf Coast and forced to shut down about a quarter of U.S. refineries.
Asian refining margins, or profits of processing a barrel of Dubai crude into refined products, have averaged $7.35 a barrel so far in October, up from $5.98 per barrel in October last year.
S-Oil said it would operate its refinery units at an "optimal level" throughout the fourth quarter without planned maintenance, as previously announced.
When asked on a call with analysts whether the refiner had any maintenance plans for next year, a senior S-Oil official said the company had not confirmed its plans for 2018.
On the same call, S-Oil officials said they expected independent refineries in China to maintain stable run rates next year.
They also said the profit or 'crack' on producing diesel was likely to remain at this year's levels in 2018 on the back of robust global economic activity. ($1 = 1,123.6700 won) (Reporting by Christine Kim and Jane Chung; Editing by Joseph Radford)
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