The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
Oil’s recovery is helping ease
the pain of shrinking output by China’s biggest energy producers. PetroChina Co., the country’s largest producer, reported first quarter earnings swung to a profit thanks to the surge in prices, even as total output fell 6.3% from a year ago. China Petroleum & Chemical Corp., the refining giant known as Sinopec, saw net income more than double while production dropped 2.4 percent.
Along with Cnooc Ltd., China’s biggest offshore explorer, the state-run firms are struggling to halt a drop in domestic crude output that’s pushed the country’s imports to a record, overtaking the US as the world’s largest buyer. And as China’s big three raise combined spending for the first time in four years, the focus is beginning to shift to natural gas as the government of President Xi Jinping seeks to cut pollution from coal.
“Higher capital spending may help output in 2018 or 2019, but no rebound is expected to show up for 2017,†said Laban Yu, an analyst with Jefferies Group LLC in Hong Kong. “Obviously higher oil price did all of them a big favor and helped lift their earnings out of the disaster they experienced a year ago.â€
Explorers globally are regaining their footing with oil prices stabilizing near $50 a barrel after a two-year crash as the Organization of Petroleum Exporting Countries leads an international effort to trim output. France’s Total SA posted a 56 percent increase in first-quarter profit beating analyst estimates as prices rebounded and it cut costs while boosting production.
PetroChina rose as much as 0.2 percent to HK$5.50 in Hong Kong, compared with a drop of as much as 0.3 percent in the city’s benchmark Hang Seng Index. Sinopec lost as much as 0.3 percent to HK$6.32 while Cnooc was little changed at HK$9.04. China’s total crude production fell 6.8 percent in the first three months of the year to average 3.92mn barrels a day, extending last year’s record pace of declines. Natural gas output, meanwhile, was up 3.4% and hit a record in March.