Low Oil Demand Hurts, However OMV Refining Beats Expectations

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BERLIN: Austrian oil and gasoline group OMV on Thursday mentioned its third-quarter working revenue fell by two thirds as weak oil costs hit its exploration and manufacturing enterprise, however a powerful efficiency from its refineries meant it beat expectations.

Gas demand has shrunk as individuals cancel leisure journeys because the COVID-19 pandemic triggers a second spherical of strict lockdowns.

OMV’s revision of its assumed Brent crude value because the benchmark futures contract struggles to interrupt above $40 a barrel led to write-offs of 594 million euros ($702 million) that hit total earnings.

Web revenue dropped to 80 million euros from 457 million a yr in the past.

However OMV’s clear present value of provides (CCS) earnings earlier than curiosity and tax (EBIT), which excludes particular objects and stock features or losses, was 317 million euros, beating a mean analyst forecast of 245 million.

The upstream unit, which explores and produces the crude, reported the next than anticipated quarterly lack of 24 million euros, with oil costs within the quarter round 30% decrease than final yr.

The refining unit’s working revenue fell 28% to 335 million euros, however a 90% utilisation fee of its refineries helped beat expectations.

That’s higher than friends.

Royal Dutch Shell, which additionally reported on Thursday, mentioned the pandemic’s impression on demand had continued into the fourth quarter and refining was anticipated to run at 69% to 77% of capability.

OMV mentioned business gross sales from its refining unit had fallen primarily due to low demand for jet gasoline. Retail gross sales solely decreased barely and higher margins greater than offset the decrease volumes.

Reflecting the pandemic impression, the group lower its 2020 refining margin forecast to round $2.5 from $3 per barrel.

It lifted its full-year manufacturing goal to 450,000-470,000 barrels of oil equal per day (boepd) from its April forecast of 440,000 boepd as manufacturing at Libya’s Sharara oilfield is again onstream.

($1 = 0.8461 euros)

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