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Stocks of state-owned oil marketing companies--Indian Oil Corp,Bharat Petroleum Corp, and Hindustan Petroleum Corp--are seen rangebound with a positive bias next week, while Reliance Industries is expected to recover some lost ground after falling over 6% this week.
Indian Oil announced 1.40 rupees per litre hike in petrol prices after market hours yesterday. The other two marketing companies will follow suit. That is likely to give a sentimental boost to their shares on Monday. While weakness in the rupee may weigh on the shares of oil marketing companies, decline in crude oil prices may cushion the fall. As most of these shares have already declined significantly over the last few days, traders don't see much downside from current levels.
A positive market may then help lift the shares slightly. The rupee fell sharply over the last three sessions to a near seven-week low of 54.90 a dollar. As the three oil marketing companies import over 75% of their crude requirements, a weak rupee results in higher costs. However, price of the Indian basket of crude is currently around $108 a barrel, $2 less than what it was a week ago. Also, refining margins are rising globally which is a positive for the refiners.
The improvement in refining margins is a bigger positive for Reliance Industries and may give traders a reason to start picking up the stock which has declined nearly 7.5% in the last eight trading sessions.
Also, the Union Budget 2013-14 is considered slightly positive for oil and gas exploration companies. The move to revenue sharing model for oil and gas
blocks from the current norm of profit sharing by the government and promise of a stable gas pricing policy are seen as positive in the long run.
The existing profit sharing model has delayed approvals in the oil and gas sector due to the involvement of the government in day-to-day operations so as to monitor the cost of exploration. Proposed review of natural gas pricing would help to address the prevailing uncertainty regarding natural gas pricing.
Stocks of state-owned oil marketing companies--Indian Oil Corp,Bharat Petroleum Corp, and Hindustan Petroleum Corp--are seen rangebound with a positive bias next week, while Reliance Industries is expected to recover some lost ground after falling over 6% this week.
Indian Oil announced 1.40 rupees per litre hike in petrol prices after market hours yesterday. The other two marketing companies will follow suit. That is likely to give a sentimental boost to their shares on Monday. While weakness in the rupee may weigh on the shares of oil marketing companies, decline in crude oil prices may cushion the fall. As most of these shares have already declined significantly over the last few days, traders don't see much downside from current levels.
A positive market may then help lift the shares slightly. The rupee fell sharply over the last three sessions to a near seven-week low of 54.90 a dollar. As the three oil marketing companies import over 75% of their crude requirements, a weak rupee results in higher costs. However, price of the Indian basket of crude is currently around $108 a barrel, $2 less than what it was a week ago. Also, refining margins are rising globally which is a positive for the refiners.
The improvement in refining margins is a bigger positive for Reliance Industries and may give traders a reason to start picking up the stock which has declined nearly 7.5% in the last eight trading sessions.
Also, the Union Budget 2013-14 is considered slightly positive for oil and gas exploration companies. The move to revenue sharing model for oil and gas
blocks from the current norm of profit sharing by the government and promise of a stable gas pricing policy are seen as positive in the long run.
The existing profit sharing model has delayed approvals in the oil and gas sector due to the involvement of the government in day-to-day operations so as to monitor the cost of exploration. Proposed review of natural gas pricing would help to address the prevailing uncertainty regarding natural gas pricing.
