Sinopec profits up as refineries go into the black

Falling crude oil costs and rising fuel prices sent Sinopec's refineries back into profit and saw the company post a 65% year-on-year rise in first-half net profit, the Wall Street Journal reported. The company, officially known as China Petroleum & Chemical Corp, said net profit came to US$4.78 billion, up from US$2.89 billion in the same period of 2006. It processed 76.25 million tons of crude oil, 6.4% more than a year earlier, while the average cost of oil fell 7% to US$60.80 per barrel, partly because Sinopec processed more low-quality crude. It plans to refine 78.25 million metric tons of crude in the second half, which would put its full year total at 145.5 million metric tons, a little less than its original target of 156 million metric tons. The company said this was being done in expectation of high international oil prices in the second half, which would put its refining and marketing operations under pressure. Sinopec added that its refineries posted losses in July and August as rising oil prices were not matched by an increase in domestic fuel prices.