TUESDAY, 1.00PM:
THE falling oil price is cutting the value of South African oil refiners’ operational stockpiles and confronting them with big losses, according to chemical sector analysts.
The apparently solid progress towards a peaceful resolution of the Gulf crisis has undermined oil prices, with the price of Brent crude dropping to $14 a barrel. At the end of the last financial year, Johannesburg Stock Exchange-listed Engen valued its stockpiles at $21 a barrel. Engen’s oil exploration subsidiary, Energy Africa, is also expected to suffer.
Engen blames low prices on continued over-production in Opec countries, but says it expects product prices to rise towards the beginning of the United States summer season.