Oil Stocks Outlook for the week – 04 to 08.05.2015
( www.rupeedesk.in )
Stocks
of state-owned oil refining and marketing companies Indian Oil Corp Ltd, Bharat
Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd may recoup slightly next
week after two consecutive weeks of losses. Stocks of the upstream companies
may next week a tad after government officials said that all upstream companies
will be exempted from downstream oil subsidies in 2015-16 (Apr-Mar) thereafter.
The subsidy on liquefied petroleum gas and kerosene is seen around 400 bln rupee
in the current financial year and it will be borne entirely by the government.
The
move will be a bog boost for Oil and Natural Gas Corp Ltd and Oil India Ltd,
which bore a last part of this subsidy, as it will leave more cash with the
companies helping them, expedite exploration and production activities. Continued
increase in crude oil prices would also lift sentiment for these companies. The
Indian basket of crude oil is over $62 a barrel now, a gain of over $7 a barrel
since March. A hike, though a regular affair now, will be sentimentally
positive for the three stocks. However, trend for the week will depend on the
broad market which is seen trading with a negative bias.
