Sinopec posts 64% jump in Q3 earnings as crude prices climb
China Petroleum & Chemical Corporation, known as Sinopec, reported that net income attributable to shareholders surged 63.6% year-on-year to $2 billion in the third quarter, helped by stronger crude prices even as domestic fuel consumption kept shrinking.
The refiner’s quarterly revenue climbed 9.3% to $115 billion, according to a filing with the stock exchange. Across the January-to-September window, net profit grew 25.3% while revenue advanced 4.4%.
Sinopec credited its nine-month performance to a greater focus on premium output — including jet fuel and various refining derivatives — plus inventory gains linked to the rally in crude prices. Its average realized crude price reached $81.92 per barrel over the period, up sharply from $66.38 a year prior, even though output levels barely moved.
Even with pricier crude, Sinopec acknowledged it was unable to seize the full benefit of the historically wide refining margins enjoyed by global oil majors. The company pointed to sluggish domestic consumption and state-imposed limits on fuel exports during the spring and summer months as the main drag.
China’s refined fuel usage dropped 8.6% from the prior year, a decline Sinopec linked to elevated prices discouraging consumption and a faster shift toward alternative energy options. Chemical demand was similarly subdued, with ethylene-equivalent consumption falling 9.4%. Processing volumes at Sinopec’s refineries over the nine-month stretch dropped 10.2% compared with the previous year.
State-run peer PetroChina likewise saw a lift from firmer oil prices, posting a 21.6% jump in third-quarter earnings on the back of price spikes tied to the Iran conflict. Still, PetroChina’s crude production, refinery activity and diesel sales within China all slipped over the nine-month period.
The figures illustrate how climbing crude prices can lift refiners’ bottom lines even as fuel consumption softens in China, the world’s largest oil importer — a trend with implications for global oil demand forecasts and the trajectory of crude prices.
Source: OilPrice.com