Oil Stocks Outlook for the week – 15 to 19.06.2015
(No
Major triggers expected next weak)
( www.rupeedesk.in )
Low
crude oil prices and robust demand resulting in strong reining margins may keep
stocks of state-owned oil marketing companies upbeat in the near term while
Reliance Industries Ltd's counter may also see some positive momentum aided by
clarity on its telecom business.
There
are no major triggers expected next weak. However, the companies are likely to
revise petrol and diesel prices early next week which may have sentimental
impact initially.
Indian
Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corporations
Ltd the fortnightly revision due on Jun 1 and there is likely to e only a minor
change next week. However, a likely weak broader market may cap the gains in
stocks of the three oil retailers.
We
prefer downstream oil marketing companies (OMC) even after the recent rally,
given improving marketing margins, steady refining margins on existing
refineries, and higher margins on new expansions.
Refining
and marketing margins have been on an uptrend this year. Low oil prices have
led to sharp upswing in oil products demand led by growth in US, China, and
India. Refining being the primary business of RIL, higher margins will result
in improved profits. The buoyant outlook for margins may reflect in its stocks.
Also, the company's chairman and managing
director
today said its telecom operations will be launched by December and the ongoing
capex programme will start yielding results from next year.
