Oil Stocks Outlook for the week- 04 to 08.07.2016
(PSU refiners seen range-bound with positive bias)
( www.rupeedesk.in )
The stock of state-owned oil marketing companies--Indian Oil Corp
Ltd, Bharat Petroleum Corp Ltd,
and Hindustan Petroleum Corp Ltd are likely to trade in a range
with a strong positive bias next week, and are seen outperforming the broad
market. In the absence on any major sectoral triggers, the trend for downstream
as well as upstream oil companies next week will be dictated by the movement in
crude oil prices and the broad market sentiment.
Crude oil futures on Multi Commodity Exchange of India are likely
to remain range-bound in a
balanced market, though the bias will remain on the downside due
to easing concern over supply.
Crude oil prices look a bit bearish on ease in supply concern, as
output recovers from Nigerian and
Canadian outages.
A decline in crude oil prices would be positive for refiners as
the commodity serves as their primary
input. On other hand, a decline in crude oil prices will
negatively impact upstream players like Oil and Natural Gas Corp Ltd and Oil
India Ltd. The bias on all OMCs (oil marketing companies) is bullish and any
fall in the stock prices can be considered a buying opportunity.
In spite of the weakness in crude oil prices, stocks of ONGC and
Oil India appear positive on charts. A weak dollar, on other hand, will help
downstream companies, as India primarily relies on imported
crude oil to meet its requirements.
