S.Korea Jan crude imports up 11 pct yr/yr

Feb 22 - * Jan crude oil imports at 83.4 mln bbls

* Jan crude runs at 78.3 mln bbls, up 7 pct yr/yr

* Jan oil product demand at 73.3 mln bbls, up 5.7 pct yr/yr

* End-Jan private oil stocks at 66.7 mln bbls, up 19 pct y/y

By Yeojung Chang and Cho Mee-young

SEOUL, Feb 22 - Oil imports by South Korea, the world's No. 5 crude buyer, jumped 11 percent in January from a year ago, posting a ninth straight monthly gain on an economic recovery and healthy refining margins, Korea National Oil Corp said on Tuesday.

Refining margins are projected to remain strong for a while because of firm demand for oil products, allowing refiners to raise prices to match rising crude prices, analysts said.

U.S. crude for March delivery touched its highest since October 2008 at $94.49 a barrel on Tuesday on concern that violence in Libya could cut more of the OPEC-member's output and that a similar story could play out in other top oil producers in North Africa and the Middle East.

"Supplies of oil products are quite tight globally, which helps refiners running their units at near full capacity," said Kim Jae-joong, senior analyst at Woori Investment & Securities.

He said the unrest in the Middle East and North Africa was actually creating additional demand for oil products, while fundamental oil demand in North America, Europe and Asia was strong because of an economic recovery.

"Refining margins are expected to remain healthy as refiners will be able to raise prices of oil products reflecting rising crude oil prices, even if crude oil tops $120-$130 a barrel."

Brent crude for April delivery rose $2.01 to $107.75 a barrel on Tuesday, after rising as high as $108.18 in early trade. On Monday, Brent hit a 2-1/2 year high of $108.70.

As deadly clashes wracked Libya's biggest cities, one international oil firm shut down as much as 100,000 barrels per day of output, about 6 percent of output in Africa's third-largest producer.

HIGHER CRUDE OIL IMPORTS

Refinery profit margins have jumped to $3.09 per barrel on average in the past five days, compared to $2.50 on average in the past 15 days and $1.21 in January.

Buoyed by strong margins, four local refiners, SK Energy Co Ltd, GS Caltex, S-Oil Corp and Hyundai Oilbank, and state-run KNOC imported a combined 83.4 million barrels last month, compared with 75.1 million barrels a year earlier, according to data posted on KNOC's web site .

South Korea's economic recovery has boosted demand for oil products and power, with Asia's fourth-largest economy expected to grow by about 5 percent in 2011.

Domestic oil product demand rose nearly 6 percent year-on-year to 73.3 million barrels in January thanks to the economic recovery, while local crude runs increased 7 percent year-on-year to 78.3 million barrels, the data showed.

"Rising crude oil prices have not yet affected demand. Refiners are unlikely to reduce their run rates due to strong demand," Lee In-jae, senior analyst at KB Investment & Securities, said, but added that the turmoil in the Middle East and Northern Africa was a concern.

"Refiners also have been raising crude runs in January and February prior to a major turnaround season starting from March."

South Korean refiners are planning heavy maintenance shutdowns of their crude distillation units starting from March, with most of the work occurring the first half of 2011, led by the country's top crude oil refiner SK Energy.

(Source: http://asia.news.yahoo.com/rtrs/20110222/tbs-crude-korea-b8dd11d.html)