Caltex Refiner Margin Slumps As Oil Jumps; Shares Down 3.7%

Caltex Australia Ltd. (CTX.AU) said Thursday that margins in its refining business fell in the month of February due to a sharp rise in the oil price.

Australia's only listed oil refiner and marketer said that the Caltex refiner margin, which represents the difference between importing refined products and importing the crude oil required to make those products, fell to US$6.44 a barrel in February from US$8.86 a barrel in January.

Margins are down even more sharply on-year, with the Caltex refiner margin at US$9.14 a barrel in February, 2010 and US$12.39 in January, 2010.

Refiners have been pressured by increased regional supply and a slump in demand following the global financial crisis, but Caltex recently said the regional demand and supply balance is starting to swing in its favor.

Citigroup on March 15 forecast Caltex's refiner margin to average US$8.60 a barrel in calendar 2011 and US$9.80 in 2012.

At 2322 GMT, Caltex shares were down 3.7% at A$15.57. They have recently risen on expectations the closure of Japanese refining capacity following a devastating earthquake and tsunami will cut regional supply, putting upward pressure on refining margins.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; Ross.Kelly@dowjones.com

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