Neste Oil Oyj (NTOIY) Thursday said refining markets are likely to remain challenging in 2010 and it expects margins to increase only gradually as it reported a below-forecast net loss for the fourth quarter of 2009.

The Finnish oil refining company said the slow recovery of demand, new capacity due to come onstream in 2010 and high petroleum product inventories will weigh on a recovery in refining margins.

"It is likely that refinery utilization rates will be limited globally and that more capacity will be closed either temporarily or for good," Neste Oil said.

The company booked a net loss of EUR1 million, an improvement on the EUR290 million loss of the same period of 2008, but below a Dow Jones Newswires poll of six analysts which pointed to a profit of EUR31.03 million.

Revenue was at EUR2.49 billion compared with EUR2.81 billion a year ago, and the loss per share for the period was EUR0.01 from a loss of EUR1.14 a share in the fourth quarter of 2008.

The company proposed a dividend of EUR0.25 a share for 2009.

Neste Oil closed at EUR11.65 Wednesday, off the previous 12-month peak of EUR13.22 reached in October following news of layoffs. The shares had made a steady recovery from July up to that point, but fell again after the October high as depressed refining markets continued to weigh on a more sustained recovery.

Company Web site: www.nesteoil.com

-By Elizabeth Adams, Dow Jones Newswires; +44 (0) 20 7842 9386; elizabeth.adams@dowjones.com
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