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Stocks of state-owned oil refining companies as well as Reliance Industries Ltd will remain rangebound but with a positive bias next week as the global refining outlook is seen improving in the near term and with the rupee's exchange rate having stabilised. The Indian currency is seen steady in early part of the week ahead of the Reserve Bank of India's second quarter monetary policy review on Tuesday. Also, the broad market is likely to remain volatile because of the October derivatives expiry on Thursday, which may weigh on the shares of oil companies as well. The rupee has hovered between 61-62 a dollar for most of this month and the price of Indian basket of crude has fallen to below $107 a barrel compared with an average of nearly $110 in September. The Indian basket closely tracks the Brent crude prices which are currently over $106 a barrel. The softening of crude prices will significantly lift the financials of Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd and will reflect in their share prices as well. An Essar Oil official said the near-term outlook for gross refining margins is improving because of revival in demand and the seasonal uptick in winter for some oil products will further improve the prospects. However, shares of Reliance Industries are unlikely to breach the 920-930 rupee level in the near term till the overhang of its disputes with the oil ministry on KG-D6 output clears.
Stocks of state-owned oil refining companies as well as Reliance Industries Ltd will remain rangebound but with a positive bias next week as the global refining outlook is seen improving in the near term and with the rupee's exchange rate having stabilised. The Indian currency is seen steady in early part of the week ahead of the Reserve Bank of India's second quarter monetary policy review on Tuesday. Also, the broad market is likely to remain volatile because of the October derivatives expiry on Thursday, which may weigh on the shares of oil companies as well. The rupee has hovered between 61-62 a dollar for most of this month and the price of Indian basket of crude has fallen to below $107 a barrel compared with an average of nearly $110 in September. The Indian basket closely tracks the Brent crude prices which are currently over $106 a barrel. The softening of crude prices will significantly lift the financials of Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd and will reflect in their share prices as well. An Essar Oil official said the near-term outlook for gross refining margins is improving because of revival in demand and the seasonal uptick in winter for some oil products will further improve the prospects. However, shares of Reliance Industries are unlikely to breach the 920-930 rupee level in the near term till the overhang of its disputes with the oil ministry on KG-D6 output clears.
