* Gasoline margins seen firm ahead of U.S. driving season
* Gasoil cracks to strengthen or remain flat in Q2
* Q1 operating income up 19 pct to $881 mln y/y
(Adds comments, details)
By Jane Chung
SEOUL, April 25 SK innovation, which
owns South Korea's top refiner SK Energy, said on
Tuesday that it expects strong demand for gasoline to support
refining margins in the current April to June quarter.
Asian refining margins, or the profit earned on turning a
barrel of Dubai crude into fuel, DUB-SIN-REF have been on the
rise since early April, hitting three-week highs of $7.29 a
barrel on April 21, on the back of strong gasoline demand.
"Refining margins for the second quarter are expected to be
healthy due to rising demand for light oil products ahead of the
driving season," the company said in an earnings statement,
referring to a seasonal pick-up in U.S. demand.
The comments were in line with remarks last week by the
country's third-largest refiner, S-Oil, which
forecast healthy second-quarter margins on solid gasoline demand
as U.S. drivers take to the roads in summer.
SK Energy said gasoil cracks - the profit margin for
refining gasoil - are expected to strengthen or remain flat in
the second quarter due to strong U.S. and Chinese economic
indicators and falling U.S. distillate inventories.
Refined product margins could also be supported by
limitations on the operations of China's independent refiners,
known as "teapots", as well as lower Chinese export quotas on
refined products, said Lee Yun-hi, head of SK Energy's planning
China's teapots were likely to hold operations steady at
about 60 percent of capacity following the Chinese government's
imports quota cut, Lee told analysts on a call.
"The Chinese government's slashed exports quota could serve
as a positive factor, but it remains to be seen if this would
lead to a drop in China's exports," he added.
SK Innovation's first-quarter operating profit rose 19
percent to 1 trillion won ($881 million) from a year earlier,
boosted by robust chemical and lubricant businesses, the
In the first three months of the year, SK Energy operated
its crude distillation units in Ulsan and Incheon at 90 percent
of capacity on average, up from 83 percent in the previous
(Reporting by Jane Chung; Editing by Richard Pullin)