Crude oil ’s steepest crash in almost six years is throwing up a new challenge for China ’s refiners — a plunge in the value of their stockpiles. The oil price drop is adding up to a triple whammy for earnings prospects through the end of the year, for companies already beset by slowing economic growth and state controls on prices. UOB Kay Hian Ltd. yesterday downgraded China’s oil sector to underweight from overweight, citing weaker demand forecasts and the lower oil price. “Refiners’ earnings will be impacted and the main reason for that is inventory losses,” said Duke Suttikulpanich, a Singapore-based oil and gas analyst at Standard Chartered Bank. “Contrary to common belief, the sharp drop in oil price does not benefit refiners’ earnings. And low demand forecasts mean margins aren’t expanding.” A fall in crude prices, the raw material used to produce fuels including gasoline and diesel, […]