Oil, gas firms to post better margins in second half

China's major oil and gas companies are expected to face fewer headwinds in the second half of this year despite their profit drops during the first six months, as the novel coronavirus epidemic lockdowns and sagging global oil prices dented their profit margins.

As the Organization of Petroleum Exporting Countries has been sticking closely to the planned oil-production cuts to guard against the market recovery and Chinese refiners' run rates have recovered in the third quarter, it is expected oil demand will stay healthy, said insiders.

"Refining business dragged down oil companies' profitability in the first half, as fuels demand took a major hit from COVID-19, and State-owned companies saw a decline in operating rates from a year earlier," said Tang Sisi, an analyst at research firm BloombergNEF.