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China Petroleum & Chemical Corporation, or Sinopec, said on Thursday that it booked an increase of 34% in its net profit for the third quarter thanks to strong fuel sales and higher rates of crude oil processing.
The world’s top refiner by capacity, Sinopec, reported a net profit of ($2.44 billion (17.86 billion Chinese yuan) for July to September, the company said in a filing quoted by Reuters.
Revenues at Sinopec increased by 4.2% in the third quarter, compared to the same period of 2022.
Sinopec’s refining throughput rose by 7.6% year-over-year in the first nine months of 2023, to around 5.18 million barrels of crude oil per day, and sales also increased amid stronger demand for fuels in China and higher fuel exports, which more than offset the lower realized oil and gas prices from the upstream division. Sinopec’s sales of refined fuels rose by 19% in volume terms.
The third quarter was a turnaround in terms of profits for Sinopec, which reported earlier this year a 20.1% decline in its net profit for the first half of 2023, amid lower international crude oil prices and weaker-than-expected fuel demand recovery in China.
But refining throughput across China recovered in the third quarter amid stronger demand, both domestically and on the export markets.
In August, high margins on the export markets and peak domestic summer demand prompted China’s refiners to boost crude oil processing to a record-high 15.23 million barrels per day (bpd). The total throughput jumped by 19.6% compared to August 2022, according to data from China’s National Bureau of Statistics (NBS). Between January and August, refinery throughput went up by 11.9% year-over-year to 14.76 million bpd, per Reuters estimates.
In September, Chinese refiners further boosted refining throughput to another record-high of 15.48 million bpd, according to official Chinese data.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.