Stock prices of South Korean oil refiners have almost halved this year from a continued slide in oil prices and a glut of petroleum products, but they are showing signs of rebounding on hopes for reduced losses on inventory and improving margins, analysts said Friday.

SK Innovation Co., the holding company of the country’s leading refiner SK Energy Co., has risen some 8 percent this month to end at 86,300 won ($78.50) on Thursday, although the price was still some 40 percent off from the 141,500 won at the end of last year.

S-Oil Corp., the nation’s third-largest refiner, saw it stocks rise almost 25 percent this month to finish at 49,800 won. The company had traded close to 75,000 won at the end of last year.

“Their stocks had moved in tandem with oil prices, but they have been oversold to some degree,” said Son Young-joo, an analyst at Kyobo Securities.

Oil prices have dipped from June levels of above $100 a barrel.

West Texas Intermediate for January delivery tumbled $2.36 to end at $54.11 a barrel on the New York Mercantile Exchange on Thursday, the lowest price since early May 2009.

The free fall in crude price comes as rising shale production in North America exacerbated a supply glut while OPEC, the oil producers group that supplies about half of the world’s crude oil, remained firm not to cut output.

Falling crude prices, which were already hurt by feeble global demand and low cracking margins, hit Korean refiners hard because they could devalue the current crude stockpiles that were purchased months ago at higher prices.

Also, their exports of petroleum products remained weak as Chinese peers jacked up outbound shipments. South Korea’s exports of petroleum products fell more than 20 percent in November from a year earlier, according to government data. That compares with a 1.9 percent drop for overall exports.

According to the tally by Shinyoung Securities, the country’s three refiners would suffer an operating loss of 318 billion won this year. Last year, they logged a combined 2.97 trillion won in operating income.

Nevertheless, the price fall in the mid and long-term does not bode ill for the refiners as it would improve sales of petroleum products and push up record-low cracking margins seen this year, analysts noted.

“Earnings may rebound amid reduced losses on inventory, and their cracking margins are expected to improve next year, staying at a two-year average level,” said Oh Jung-il, an analyst at Shinyoung Securities. Overcapacity in the industry may continue into next year, but refining margins may remain stable, he said. (Yonhap)