South Korean refiners report steepest quarterly losses in years
Q4 margins to improve on winter demand, reduced run rates
Asia JuneAug refining margins weakest in two years LSEG data

SEOUL, Nov 4 Reuters South Korean refiners reported on Monday sharp losses in the third quarter from oil refining, but expect their margins to recover in the fourth quarter with peak winter demand and refinery run cuts in Asia.

SK Innovation, parent of South Korea39;s largest refiner SK Energy, said the JulySeptember quarter operating loss for its refining business was 616.6 billion won 450.2 million, its largest loss since the fourth quarter of 2022.

Declining oil prices amid concerns over slowing demand in China and a potential recession in the U.S. caused significant inventoryrelated losses, while refining margins were poor in the third quarter, the company said.

We were in an unfavourable macro backdrop, which drove down the crude oil price and the overall product market was squeezed, Son Sungchul, head of corporate strategic planning at SK Energy, told analysts on an earnings call.

We continued to maintain a minimal run rate for our crude distillation units CDUs, so that we can effectively defend against negative topping margins, Son said.

The company maintained its average CDU run rate at 81 in third quarter from the second quarter, but it is down 1 percentage point from 2023.

SOil, the country39;s thirdlargest refiner whose main shareholder is Saudi Aramco, reported a…