Oil Stocks Outlook for the week – 08 to 12.06.2015 (Lack of major triggers next week)

Oil Stocks Outlook for the week – 08 to 12.06.2015

(Lack of major triggers next week)

( www.rupeedesk.in )

Shares of state-owned oil marketing companies are expected to trade in a range next week due to lack of major triggers in the near term though crude oil prices and rupee-dollar movement could have some impact.

Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd did not tinker with petrol and diesel prices this week. A price revision was due on Jun 1 and the companies were expected to cut prices slightly. This will leave the companies with slightly higher margins as a time when refining margins are already robust.

Crude prices continue to trend lower and are expected to dip further after the Organization of the Petroleum Exporting Countries decided to maintain output from its members at higher levels in order squeeze out high cost producers. Lower oil prices could keep demand for products firm in the near term and margins may continue to trend up.

That along with a better marketing scenario in India could keep the good times going for the stateowned refiners. The buoyancy would also reflect in the stocks. However, oil producing companies like Oil and Natural Gas Corp Ltd and Oil India would come further under pressure if crude prices dip. Shares of both these companies are expected to trend lower in the near term and will mostly track oil prices.