SPC had just released the earning for FY2006.
Singapore Petroleum Co Ltd had just released the earning for FY2006 that the result is fell 29.5% year on year to S$284.57 million, the margins have soften during second half of 2006 this may cause by the higher cost of crude oil purchased for refinery to petroleum products. The recent crude price is lower for example during 2nd half of 2006 SPC maybe purchase the highest crude price at around near US$80/barrel compare to recent price of US$55/barrel there is aready a difference
of US$25/barrel and this is just difference in crude price purchase only that have not included the refinery cost and other costs, this can aready tell you how well is SPC doing in manage the costing.
results of year to December 2006:
Sales - 8.57 bln sgd vs 7.47 bln
Pretax profit - 338.48 mln sgd vs 439.10 mln
Net profit - 284.57 mln sgd vs 403.56 mln
EPS - 55.23 cents vs 79.22 cents
Final div - 20 cents; unchanged
Special div - 15 cents vs 12 cents
Crude oil price.
There is a lot of factors that causes the crude oil price to fall, for example China ready have enough in building up the crude oil reserve, world oil field activity on exploration, oil well drilling, well completion and crude oil recovery that are out numbers of projects that are carring out.(those news can be found on the past news on internet base on the exiting company news to know them.) also as well as the weather that make the demand of crude oil weaken, for example those country this year winter are warmer than last year. There is the news from those experts that said the coming February winter temperature may fall below than December 2006 and January 2007's temperture. I will watch how high the crude price will rebound. let's us see how first.
Invest in Oil stock is risky.
this is due to crude oil price is unpredictable. Even those hedge fund managers they themselve as a professional also making loss on buying crude oil. if you are interested you can look into some area that are extreme far below than market fair price like example AP oil is one of them that are traded at below market fair price and there is issue on CAD investigation going on and that had not resolved yet unitl now so the risk is there but is lower than buying expensive those one. AP oil is good for trading only by buying small amount of volume. - this is my view only, Please do your own research before you commit buying the stock.
Extra-
There is a recent news on US president that wants to put more effort on renewable enegry. This is to believe that the trend crude oil is going for bearish in long term (long term mean next 5 to 10 years time). so please beware of the risk in invest on oil stock.
