Oil Stocks Outlook for the week – 02 to 06.01.2017
Oil Stocks Outlook for the week – 02 to 06.01.2017
( www.rupeedesk.in )
The trend for shares of public sector oil marketing companies Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd is positive for next week and they are expected to outperform the broad market. These stocks are backed by strong fundamentals, including robust domestic demand for fuel and strong refining and marketing margins. For stocks of upstream companies such as Oil and Natural Gas Corp Ltd, Cairn India Ltd, and Oil India Ltd, the rise in prices of crude oil over the past few weeks has lent some strength for the immediate-to-near term. The recent spurt in prices followed the Organization of the Petroleum Exporting Countries' decision to cut output by 1.2 mln barrels per day from January. It was further helped by major non-OPEC producers joining the production management arrangement by agreeing to cut their output by 558,000 bpd. Given that the production cut is scheduled to come into effect from Sunday, crude oil prices may rise next week, which could further help stocks of upstream oil companies. Though the rise in prices of crude oil will increase input costs for refiners, they are set to benefit from inventory gains due to the spike. Also, given that prices of most fuels are now market-linked, the downside of higher crude oil prices for these companies seems limited for the time being. According to analysts tracking crude oil, futures contracts of the black liquid are likely to extend gains on both domestic as well as global markets next week, with the production curbs kicking in. However, only mid way through January will investors have an idea about how much production is being cut by the producers. Next week, the January contract of crude oil on the Multi Commodity Exchange of India may find support at 3,600 rupees a bbl and face resistance at 3,850 rupees. The February-delivery contract on the New York Mercantile Exchange is seen trading in the range of $52.5-$56.5 a bbl. Fluctuation in the dollar-rupee exchange rates is also likely to affect shares of oil companies. A weaker rupee will benefit upstream companies as they sell oil and gas in dollars. Refiners, however, will lose if the dollar strengthens, as their outgo on buying oil and gas will
increase.
Free Intraday Tips : Join Our Whatsapp No : 9841986753
Free Commodity Tips : Join our Whatsapp No : 9094047040
Oil Stocks Outlook for the week – 02 to 06.01.2017
( www.rupeedesk.in )
The trend for shares of public sector oil marketing companies Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd is positive for next week and they are expected to outperform the broad market. These stocks are backed by strong fundamentals, including robust domestic demand for fuel and strong refining and marketing margins. For stocks of upstream companies such as Oil and Natural Gas Corp Ltd, Cairn India Ltd, and Oil India Ltd, the rise in prices of crude oil over the past few weeks has lent some strength for the immediate-to-near term. The recent spurt in prices followed the Organization of the Petroleum Exporting Countries' decision to cut output by 1.2 mln barrels per day from January. It was further helped by major non-OPEC producers joining the production management arrangement by agreeing to cut their output by 558,000 bpd. Given that the production cut is scheduled to come into effect from Sunday, crude oil prices may rise next week, which could further help stocks of upstream oil companies. Though the rise in prices of crude oil will increase input costs for refiners, they are set to benefit from inventory gains due to the spike. Also, given that prices of most fuels are now market-linked, the downside of higher crude oil prices for these companies seems limited for the time being. According to analysts tracking crude oil, futures contracts of the black liquid are likely to extend gains on both domestic as well as global markets next week, with the production curbs kicking in. However, only mid way through January will investors have an idea about how much production is being cut by the producers. Next week, the January contract of crude oil on the Multi Commodity Exchange of India may find support at 3,600 rupees a bbl and face resistance at 3,850 rupees. The February-delivery contract on the New York Mercantile Exchange is seen trading in the range of $52.5-$56.5 a bbl. Fluctuation in the dollar-rupee exchange rates is also likely to affect shares of oil companies. A weaker rupee will benefit upstream companies as they sell oil and gas in dollars. Refiners, however, will lose if the dollar strengthens, as their outgo on buying oil and gas will
increase.
