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Stocks of oil marketing companies will track rupee-dollar movement next week but are unlikely to decline much from current levels, while those of Reliance Industries Ltd and Oil and Natural Gas Corp Ltd are seen range-bound with positive bias. The rupee touched an all-time low of 59.97 to a dollar on Thursday. Indian Oil Corp Ltd, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd being huge importers of crude oil, depreciation of the rupee make the commodity costlier for them, increasing revenue losses on subsidised fuels. The state-owned refining and marketing companies import almost 80% of their crude oil requirement. At current levels, every one-rupee change in the value of the dollar has an inverse impact of over $3 per barrel on the prices of crude, a senior official of one of the state-owned oil refining companies said. The rupee is seen gaining marginally against the US dollar in first half of next week on corporate-related dollar inflows. Unless there is any further negative news on the global front, the rupee is expected to remain within the 58.95-59.45 a dollar range in the near term. Oil companies' stocks may recoup some losses if rupee strengthens. Stocks of Reliance Industries Ltd will track the developments on the new gas pricing formula, which is expected to be positive for the company. Till the government decides on the new pricing, the stocks may keep oscillating around current levels. The Street is expecting price of natural gas in the country to be revised to $7-$8 per mBtu. ONGC too will benefit from the revision in gas prices, and stocks are seen gaining after the announcement. However, concerns over increasing subsidy burden on the company due to the rising revenue losses of the oil marketing companies may cap the gains.
Stocks of oil marketing companies will track rupee-dollar movement next week but are unlikely to decline much from current levels, while those of Reliance Industries Ltd and Oil and Natural Gas Corp Ltd are seen range-bound with positive bias. The rupee touched an all-time low of 59.97 to a dollar on Thursday. Indian Oil Corp Ltd, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd being huge importers of crude oil, depreciation of the rupee make the commodity costlier for them, increasing revenue losses on subsidised fuels. The state-owned refining and marketing companies import almost 80% of their crude oil requirement. At current levels, every one-rupee change in the value of the dollar has an inverse impact of over $3 per barrel on the prices of crude, a senior official of one of the state-owned oil refining companies said. The rupee is seen gaining marginally against the US dollar in first half of next week on corporate-related dollar inflows. Unless there is any further negative news on the global front, the rupee is expected to remain within the 58.95-59.45 a dollar range in the near term. Oil companies' stocks may recoup some losses if rupee strengthens. Stocks of Reliance Industries Ltd will track the developments on the new gas pricing formula, which is expected to be positive for the company. Till the government decides on the new pricing, the stocks may keep oscillating around current levels. The Street is expecting price of natural gas in the country to be revised to $7-$8 per mBtu. ONGC too will benefit from the revision in gas prices, and stocks are seen gaining after the announcement. However, concerns over increasing subsidy burden on the company due to the rising revenue losses of the oil marketing companies may cap the gains.
