Shares in Thailand's oil refiners rose sharply on Monday on expectations the refinery sector would benefit from tight supply and rising margins after the quake in Japan.

Analysts said the Thai firms should benefit from rising refining margins and product spreads as supply was tight after several refiners in Japan had to close after Friday's earthquake, which affected about 20% of refining capacity in Japan.

The gain was led by Thai Oil after some analysts rated the country's top oil refiner their "top pick."

"With the decline in supply, we expect the regional refinery and aromatic spread to rise," Kim Eng Securities said in a note. "The current Singapore gross refining margin is $7 a barrel, up roughly 25% since last quarter. We expect local refiners and aromatic producers to benefit," the broker said.

At the midsession break, Thai Oil shares were up 3.5% at a morning high of 80.50 baht, while the broad index was 0.9% higher.

PTT Aromatics and Refining gained 3.4%, while IRPC shot up 3.5%. Esso (Thailand), a Thai unit of Exxon Mobil, was up 2.2% and Bangchak Petroleum 1%. PTT, which has stakes in Thai Oil and other refineries, rose 1.2%.

Analysts said Thai Oil was expected to report strong earnings for the first quarter as higher oil prices boosted refining margins and its petrochemical business would benefit from rising product spreads, especially for paraxylene.

"Thai Oil's earnings hit bottom in the second quarter of 2010 and we expect the recovery in the refinery sector to continue," Far East Securities analyst Parin Kitchatornpitak said in a note.