According to DBS Vickers Securities (Thailand), refinery and upstream energy companies outpaced the petrochemical sector this week, supported by a modest rise in oil prices. Market sentiment was shaped by ongoing Middle East geopolitical tensions and firm physical oil differentials.
The movement in crude prices saw only slight gains, restrained by continued macroeconomic uncertainty, limiting further price increases. Gas markets stabilized compared to recent volatility, as both Henry Hub and European gas prices traded in tighter ranges, attributed to a normalization in weather patterns.
For refineries, gasoline margins continued to lead, while jet fuel and diesel cracks showed signs of weakening. The Singapore gross refining margin rose by 6% on a weekly basis. However, an uptick in crude premiums pushed overall refinery costs for Asian operators higher.
Within petrochemicals, the aromatics segment retained strength over polymers, where product spreads stayed narrow. A gradual recovery appeared in the PVC segment due to seasonal demand from the construction industry, while PET margins improved slightly.
On the Thai equity market, PTTEP benefited from resilient oil prices. Refinery stocks with distillate exposure, including TOP, SPRC, and BCP, gained from robust distillate cracks, despite marginally higher crude premiums.
PTT saw gains from its upstream business, but these were offset by ongoing softness in the petrochemical segment. For SCC, the overall outlook remained neutral, with PVC supporting performance, but HDPE margins were still weak. Meanwhile, PTTGC and IRPC faced pressure from subdued polymer margins.
