Hana Shizuoka Trading has commented on Sinopec as the company published its most profitable quarter in recent years due to higher oil prices.
According to its report, the company expects higher oil sales in the second half of the year. The figures were far more than what was projected as the company earned more then the first quarter of the year seeing a 54% increase in areas such as upstream and its refining business.
Sinopec saw the highest net income growth since 2013 as it increased from 18.8 billion yuan to 22.8 billion yuan in just first three months of the financial year reported analysts from Hana Shizuoka Trading.
The higher earnings were the result of oil climbing to $80 per barrel in May this year. The price increased as a result of sanctions put on Iranian exports and falling supply from countries such as Libya and Venezuela.
Thomas Hinton, Head of Corporate Trading at Hana Shizuoka Trading commented on the recent quarter “This increase in revenue was due to the high prices of oil and gas and stronger fuel margins. Sinopec is aiming to refine more than 120 million tonnes of crude oil in the second half of the year.”
Sinopec has said that they are looking to process over 120 million tonnes of crude oil by end of the year. Domestic fuel sales will be just over 90 million tonnes, a ten percent rise compared to the first half of the year.
According to Senior Vice President, Luke King at Hana Shizuoka Trading “Shares within Sinopec had rallied over 5 percent after it had issued an interim dividend. We are seeing more and more investors looking at energy stocks.”
With recent on going tensions and improving Chinese refinery demand, investors remain optimistic for higher oil prices in the near future.