State-owned Chinese energy major Sinopec said on March 27, 2017, that 2016 net profit jumped 44 %, its 1st annual profit rise in 3 years, as strong demand and better margins in its downstream refining business helped offset low oil prices.
Sinopec saw net profit surge to $6.8 billion, it said in a statement filed late Sunday to the Hong Kong stock exchange, where it is listed.
Asia's biggest refiner had previously seen profits dive around 30 % in both 2015 and 2014.
Sinopec president Dai Houliang said one reason for the better-than-expected results is that demand for chemicals grew steadily.
While the upstream business was sluggish owing to low international crude oil prices, the downstream refining business improved as domestic demand for refined oil products held steady, and grew steadily for chemicals, Dai said.
In a separate statement, Sinopec also forecast profit would increase in the 1st quarter of 2017.
Lower crude prices really helped Sinopec's margins last year, Tian Miao, a Beijing-based analyst at North Square Blue Oak, told Bloomberg News.
Sinopec may continue to benefit from China's strong fuel demand growth, especially gasoline.
The risk for Sinopec going forward is that crude prices rise too high and too fast as higher upstream margins wouldn't be enough to cover refining losses.
On Monday morning, Sinopec was up 0.65 % in Hong Kong but down 1.21 % in Shanghai, where it is also listed.
Another Chinese oil giant CNOOC, which specialises in upstream exploration and development of oil and natural gas, said last week it suffered a 96.85 % plunge in annual net profit, hit by the low crude prices.
Profit fell to 637 million yuan from 20.25 billion yuan in 2015, the firm said in a statement.
CNNOC shares were up 0.32 % in Hong Kong trading on Monday morning.