Oil Stocks
Outlook for the week – 20 to 24.07.2015
(PSU refiners range bound next
week)
Stocks of state-owned oil
refining and marketing companies may trade in a range next week but the
focus will be on Reliance
Industries Ltd as it is scheduled to announce its Apr-Jun earnings on Jul24.
Having gained 7-19% since Jul 1,
stocks of Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and
Hindustan Petroleum Corp Ltd are
likely to come under some pressure early next week as investors
may chose to book profits.
However, continued decline in oil
prices and robust global refining margins may provide support on
the downside. With sanctions on
Iran set to go, oil prices are expected to continue trending lower, a
positive for these three
companies. The Indian basket of crude declined to $56.3 a barrel this week
from nearly $58.00 last Friday.
It was close to $62 at the beginning of this month.
Also, lifting of international
sanctions on Iran will help India import more from the country and put
pressure on other west Asian
nations to reduce the "Asian premium" being charged to Indian
companies.
RIL stocks would also closely
follow trend in refining margins and oil prices. The company is
expected to report gross refining
margin of over $9 a barrel for Apr-Jun, up from $8.7 a year ago.
The company's net profit is seen
growing 7% year-on-year to 60.3 bln rupees. It will detail earnings
post market hours next Friday but
its stocks may trade in positive zone in anticipation of a strong
performance.
Stocks of Oil and Natural Gas
Corp Ltd and Oil India Ltd will remain under pressure in the near
term as the decline in oil prices
will hit their bottomline.