Oil Stocks Outlook For The Week – 26 To 29.12.2017

Oil Stocks Outlook For The Week – 26 To 29.12.2017

             Equity Cash/Futures/Options Segment 

Stocks of state-owned refiners and fuel retailers--Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp-are expected to continue in the consolidation mode with an underlying positive bias next Week. In terms of fundamentals, the three state-owned oil marketing companies continue to be on solid ground, benefiting from healthy domestic demand for fuel as well as robust
core refining and marketing margins, which lend a positive outlook to these stocks. In the absence of any major sectoral triggers, stocks of oil companies are expected to be guided by the movement in
crude oil prices, news flow, and the sentiment in the broader market. Futures contracts of crude oil are likely to be range bound as volumes are expected to remain low next week. Gains due to a fall in crude inventory are likely to be negated by record-high US output. The crude oil output in the US rose by 9,000 barrels per day to a record 9.789 mln bpd in the week ended Dec 15, the US Energy Information Administration said in an update. This was the ninth straight week that the
crude oil output in the US rose. Stocks of upstream players such as Oil and Natural Gas Corp and Oil India may move in line with the movement in crude oil prices next week. The fundamentals for these stocks have started improving, as strong oil prices will lead to a strong financial performance for upstream companies. Any major shift in the dollar-rupee exchange rates could also impact shares 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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