Oil refining stocks edged higher on Friday trading after a blast at South Korea’s third-largest refinery last night, with analysts foreseeing growing supply shortage concerns.
As of 11.25 hrs. local time in Thailand, the share price of Thai Oil Plc. (SET: TOP) rose THB1.00/share, or 1.75% to THB58.25/share, with a trading value of THB123 million.
The share price of Star Petroleum Refining Plc. (SET: SPRC) rose THB0.20/share, or 1.71% to THB11.90/share, with a trading value of THB246 million.
The share price of Esso (Thailand) Plc. (SET: ESSO) rose THB0.15/share, or 1.57% to THB9.70/share, with a trading value of THB98 million.
Explosion occurred at S-Oil Corp’s Onsan refinery in Ulsan, South Korea, late Thursday night, according to the local media Yonhap news.
S-Oil is the third-largest refiner in South Korea and sixth in the world, according to the data in 2021 from Statista. The major shareholder of the firm is Saudi Aramco, Saudi Arabian public petroleum and natural gas company.
Authorities said the explosion occurred while workers were testing the facility’s alkylation processing unit following a regular maintenance procedure.
The report stated that there are eight injuries from the blast in which six of the injured are seriously wounded.
The refinery is located about 380 km (240 miles) southeast of Seoul.
Capital Nomura Securities views this incident as a positive for oil refining stocks given the possibility that petroleum and petrochemical spreads would increase as a result of tighter supply.
Initially, it is projected that the refinery group will benefit the most, followed by the petrochemical group, which may gain in the short run as the spread widens and PX/BZ/PP have oversupply.