Oil Stocks Outlook for the week – 17 to 21.07.2017
Oil Stocks Outlook for the week – 17 to 21.07.2017
( www.rupeedesk.in )
Stocks of public sector oil refiners and retailers Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp--are expected to consolidate next week. Later in the week, stock of Reliance Industries will come into focus as the company is slated to detail its Apr-Jun earnings on Thursday. As for the three state-owned fuel retailers, these companies continue to be on solid ground, benefiting from the rise in domestic demand for fuels as well as robust refining and marketing margins, which lend a positive outlook for these stocks in the medium-to-long term. As for the three stocks, all eyes will be on Hindustan Petroleum in view of the recent developments about the proposed acquisition of the company by state-owned upstream giant Oil and Natural Gas Corp. The Hindustan Petroleum stock witnessed a steep rise this week after news reports suggested that ONGC may be asked to pay a substantial premium to the current market price of the stock and that the acquisition is likely to be completed within the ongoing financial year. Any further clarity on the proposed transaction would, in all likelihood, have a bearing on the stocks of Hindustan Petroleum and ONGC. In the absence of any other major sectoral triggers, stock of oil companies could be impacted by prices of crude oil, news flow and sentiment in the broad market. Crude oil futures on global and domestic exchanges are seen falling next week due to higher supplies from Organization of the Petroleum Exporting Countries in June, with compliance levels for production cuts agreed upon falling to lowest this year. Both the OPEC and the International Energy Agency showed an increase in the cartel's production in the month of June. OPEC production rose by 393,500 barrels per day to 32.61 mln bpd in June, primarily due to higher production in Libya and Nigeria, OPEC said in its monthly report. The cartel's compliance also slumped to 78%, the lowest this year, Paris-based IEA said. Stocks of upstream players such as ONGC and Oil India may remain weak on account of low crude oil prices. On technical charts, the two stocks are expected to consolidate. Any major shift in the dollarrupee exchange rates could also impact shares of oil companies. If the dollar weakens against the rupee, it could add to the woes of upstream companies. This is because upstream companies price oil and gas in dollar terms and a weak greenback leads to a decline in the actual price realisation in rupee terms. On the other hand, refining companies stand to gain from a weaker dollar, as it would reduce their outgo towards purchase of crude oil and gas.
Source : Cogencis Information Services Ltd.
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Oil Stocks Outlook for the week – 17 to 21.07.2017
( www.rupeedesk.in )
Stocks of public sector oil refiners and retailers Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp--are expected to consolidate next week. Later in the week, stock of Reliance Industries will come into focus as the company is slated to detail its Apr-Jun earnings on Thursday. As for the three state-owned fuel retailers, these companies continue to be on solid ground, benefiting from the rise in domestic demand for fuels as well as robust refining and marketing margins, which lend a positive outlook for these stocks in the medium-to-long term. As for the three stocks, all eyes will be on Hindustan Petroleum in view of the recent developments about the proposed acquisition of the company by state-owned upstream giant Oil and Natural Gas Corp. The Hindustan Petroleum stock witnessed a steep rise this week after news reports suggested that ONGC may be asked to pay a substantial premium to the current market price of the stock and that the acquisition is likely to be completed within the ongoing financial year. Any further clarity on the proposed transaction would, in all likelihood, have a bearing on the stocks of Hindustan Petroleum and ONGC. In the absence of any other major sectoral triggers, stock of oil companies could be impacted by prices of crude oil, news flow and sentiment in the broad market. Crude oil futures on global and domestic exchanges are seen falling next week due to higher supplies from Organization of the Petroleum Exporting Countries in June, with compliance levels for production cuts agreed upon falling to lowest this year. Both the OPEC and the International Energy Agency showed an increase in the cartel's production in the month of June. OPEC production rose by 393,500 barrels per day to 32.61 mln bpd in June, primarily due to higher production in Libya and Nigeria, OPEC said in its monthly report. The cartel's compliance also slumped to 78%, the lowest this year, Paris-based IEA said. Stocks of upstream players such as ONGC and Oil India may remain weak on account of low crude oil prices. On technical charts, the two stocks are expected to consolidate. Any major shift in the dollarrupee exchange rates could also impact shares of oil companies. If the dollar weakens against the rupee, it could add to the woes of upstream companies. This is because upstream companies price oil and gas in dollar terms and a weak greenback leads to a decline in the actual price realisation in rupee terms. On the other hand, refining companies stand to gain from a weaker dollar, as it would reduce their outgo towards purchase of crude oil and gas.
Source : Cogencis Information Services Ltd.
