South Korea’s S-Oil expects winter demand to boost refining margins

South Korean refiner S-Oil Corp expects robust demand in the winter season to increase refining margins in the fourth quarter of 2016, Reuters reported, citing a senior company official.

S-Oil, in which Saudi Aramco is the main shareholder, reported a net profit of $102.18 million in Q3 2016, down from $560.2 million the previous quarter on lower inventory and a strong local currency.

“As demand-growth in the fourth quarter will be mainly driven by heating oil such as kerosene and gasoil, gasoline margins are expected to continue at current levels,” the official said, adding that the margins rebounded to about $12.30 a barrel in the second quarter following seasonal maintenance.

The company estimates that Asian demand will grow by 1.1-1.3 million barrels per day (bpd) quarter-on-quarter and 0.7-1.0 million bpd year-on-year, it said in an earnings statement.

“In the longer-term, demand growth is expected to outstrip incremental supply on slow capacity expansions,” the refiner added.