Oil Stocks Outlook for the week – 11 to 15.01.2016
(Refining
companies shares seen up)
( www.rupeedesk.in )
Shares
of crude oil refining companies may remain buoyant in the
near
term as the continued fall in oil prices is likely to further boost
refining
margins.
But
gains may be capped due to concerns over inventory losses, specially
for
Indian Oil Corp Ltd and Hindustan Petroleum Corp Ltd, as a sharp
fall
in oil prices may reduce the value of their stored products and raw
material.
The Indian crude basket slipped below $30 a barrel this week.
Since
Jan 1, it has fallen over 12%.
The
low oil prices will continue to weigh on the shares of upstream
companies
Oil and Natural Gas Corp Ltd and Oil India Ltd. The outlook
for
oil prices remains weak as supplies continue to be at elevated levels
while
major consuming economies like China are facing slowdown.
HPCL
is coming out of the consolidation seen from August onwards.
RELIANCE
has been outperforming the broad market, with gross
refining
margins moving to historically high levels. Several of the
company's
expansion projects, which will come on stream this year, are
expected
to boost its earnings.
In a
report on Wednesday, CLSA India said it expects RIL's operating
profit
to increase by over 50% to $10 bln by 2017-18 (Apr-Mar), driven
by
expansion of its refining and petrochemicals businesses.