By Yongchang Chin


PTT Oil & Retail Business PCL, a Thai distributor of petroleum products, said this week that its latest quarterly profit fell, as higher aviation-refueling and maintenance expenses offset a steep rise in revenue from higher energy-commodity prices. Here are some remarks from the company's earnings report.


On fourth-quarter performance:

"The global demand for oil consumption recovered due to various economic stimuli and the rapid distribution of vaccines in many countries, which led to a slight increase of oil prices in the global market. These factors contributed to our oil business... recording 35.4% higher revenue [on-quarter] from sales volume that increased by 24.1% [on-quarter], predominantly from diesel and gasoline."


On outlook for oil prices:

The "crude oil price [is] expected to rise higher than the previous year, especially at the beginning of the year, with supporting factor stemming from easing of concerns over the Omicron variant, because despite the rapid spread, the symptoms are mild compared to other variants. As a result, lack of lockdown announcement from many countries translates to minimal effect on global oil demand.... On the supply side, geopolitical concerns could affect global oil supply. Some OPEC+ producers, such as Libya and Nigeria, are facing difficulties in increasing crude oil production." The trend of refined oil products is in line with crude-oil price trends, with the fundamentals of petroleum-product demand seen as supportive, the company also said.


On gasoline:

Fourth-quarter "gasoline price averaged at $93.8 per barrel, [which] improved from 3Q 2021 at $83.4 per barrel. The average gasoline price significantly increased more than Dubai [oil benchmark] price, which came from easing of travel control" measures. Rising gasoline demand and imports led to light-distillate inventories in Singapore and the U.S. dropping below their five-year average, the company added. "Gasoline demand expected to improve because many countries have not imposed travel control measures for the Omicron variant outbreak. Moreover, refined oil export quotas from China decreased more than 56.0% compared to the previous year."


On diesel:

"Gasoil (diesel) price in 4Q averaged at US$89.8 per barrel, improved from 3Q 2021 at $77.1 per barrel, which significantly increased over Dubai price," PTTOR said. This was because of "increasing demand from both the industrial and transportation sectors in several countries. The recovery came from the easing of lockdown measures in Asia." The company added: "Diesel demand is expected to rise due to recovery in the industrial and transport sectors, especially in Asia. Although the number of new cases of Covid-19 is increasing, several countries have no lockdown measures. Furthermore, middle distillate inventory levels in key regions continue to decline."


On jet fuel:

"Jet kerosene price in 4Q 2021 averaged at $88.6 per barrel, improved from 3Q 2021 at $77.0 per barrel, making the improvement higher than Dubai" oil prices. "Kerosene demand came from a continuous increase of air cargo compared to 2019 or pre-Covid-19 period, a relaxation of international travel quarantines from the U.S., growing domestic flights in India and additional reserves of kerosene for heating during the winter in Japan." It added that "jet fuel demand is also expected to rise gradually, with supporting factors stemming from heating demand in North Asia and a recovery in international flights. Nevertheless, global aviation demand in 2022 is not expected to not reach pre-Covid-19 levels."


Write to Yongchang Chin at yongchang.chin@wsj.com


(END) Dow Jones Newswires

02-17-22 0415ET