UPDATE 1-Thai Oil Q2 profit at record high, beats forecast

(Adds details, IRPC results)

BANGKOK, Aug 8 (Reuters) - Top refiner Thai Oil PCL TOP.BK reported a better-than-expected 59 percent rise in second quarter net profit to a record high on Friday as gross refining margins surged in line with crude prices.

Analysts expect earnings growth for the refinery sector to slow in the next two quarters as margins come under pressure from new capacity coming online in India.

Thai Oil, nearly half-owned by top energy firm PTT PCL PTT.BK, posted a net profit of 10.5 billion baht ($312 million), or 5.17 baht per share, up from 6.62 billion baht a year earlier and 3.87 billion baht in the previous quarter.

Seven analysts polled by Reuters had forecast an average net profit of 9.36 billion baht for the April-June quarter.

Oil prices averaged over $120 a barrel in the second quarter, almost double the level in the same period of 2007, before rising to a record high above $147/barrel on July 11.

Thai Oil's gross refining margin was at $9.6 a barrel in the second quarter, up from $7.9 a year earlier, and its integrated margins, which include petrochemical units, were $12 a barrel, up from $10.4 a year earlier, the company said in a statement.

It ran at 105 percent of its 275,000 barrel-per-day capacity in the April-June quarter.

Smaller rival IRPC IRPC.BK, 35 percent owned by PTT, reported second-quarter earnings up 3.4 percent, as higher refining margins helped offset a weak petrochemical business.

IRPC operates a simple refinery, which normally has lower margins than Thai Oil's complex refinery.

Before the earnings announcement, Thai Oil shares, valued at $3.3 billion on the Thai bourse, fell nearly 1 percent at 53.50 baht on Friday, while the main index .SETI was down 2 percent. IRPC shares lost 2.43 percent to 4.02 baht. ($1 = 33.57 Baht) (Reporting by Khettiya Jittapong; Editing by Ed Cropley)