Oil Stocks Outlook for the week – 08 to 12.05.2017
Oil Stocks Outlook for the week – 08 to 12.05.2017
( www.rupeedesk.in )
The shares of public sector oil refining and retailing companies--Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd--may rise in the coming sessions on the back of strong fundamentals and likely weakness in prices of crude oil. These three companies are on solid ground and have been benefiting from the rise in domestic demand for fuels and robust refining and marketing margins, which lends them a positive outlook for the medium to long term. In the absence of any major sectoral triggers, shares of oil companies could be impacted by crude oil prices, news flow, and sentiment in the broad market. With US crude oil production at its highest level since August 2015, doubts over the effectiveness of the output cut deal by major producers in restoring the supply-demand balance may pull prices lower next week. The stocks of upstream players such as Oil and Natural Gas Corp Ltd and Oil India Ltd may witness negativity on account of weakness in oil prices. On the other hand, refiners stand to gain from the low prices as the commodity is the primary raw material for them. -Earlier, crude oil prices had tumbled to a near six-month low of $43.76 a barrel. -The Organization of the Petroleum Exporting Countries and other major oil producers are scheduled to meet on May 25 to take a decision over whether the production cuts currently in force would be extended beyond June. -With reports of Russia's indecisiveness doing rounds, the country's energy minister had issued a statement saying that the Kremlin was inclined to think that extension is reasonable. However, the quantum of the cut to be agreed upon for the extension of the deal is to be gauged for physical adjustment in the market, as global crude oil inventories continue to be above the five-year average. Any major shift in the dollar-rupee exchange rate can also impact stocks of oil companies. If the dollar weakens against the rupee, it could add to the woes of upstream companies.
Source : Cogencis Information Services Ltd.
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Oil Stocks Outlook for the week – 08 to 12.05.2017
( www.rupeedesk.in )
The shares of public sector oil refining and retailing companies--Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd--may rise in the coming sessions on the back of strong fundamentals and likely weakness in prices of crude oil. These three companies are on solid ground and have been benefiting from the rise in domestic demand for fuels and robust refining and marketing margins, which lends them a positive outlook for the medium to long term. In the absence of any major sectoral triggers, shares of oil companies could be impacted by crude oil prices, news flow, and sentiment in the broad market. With US crude oil production at its highest level since August 2015, doubts over the effectiveness of the output cut deal by major producers in restoring the supply-demand balance may pull prices lower next week. The stocks of upstream players such as Oil and Natural Gas Corp Ltd and Oil India Ltd may witness negativity on account of weakness in oil prices. On the other hand, refiners stand to gain from the low prices as the commodity is the primary raw material for them. -Earlier, crude oil prices had tumbled to a near six-month low of $43.76 a barrel. -The Organization of the Petroleum Exporting Countries and other major oil producers are scheduled to meet on May 25 to take a decision over whether the production cuts currently in force would be extended beyond June. -With reports of Russia's indecisiveness doing rounds, the country's energy minister had issued a statement saying that the Kremlin was inclined to think that extension is reasonable. However, the quantum of the cut to be agreed upon for the extension of the deal is to be gauged for physical adjustment in the market, as global crude oil inventories continue to be above the five-year average. Any major shift in the dollar-rupee exchange rate can also impact stocks of oil companies. If the dollar weakens against the rupee, it could add to the woes of upstream companies.
Source : Cogencis Information Services Ltd.
