Oil Stocks Outlook for the week – 21 to 24.08.2017
Oil Stocks Outlook for the week – 21 to 24.08.2017
( www.rupeedesk.in )
After recovering this week from a spell of correction, shares of public sector oil refiners and retailers--Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp--are expected to strengthen further over the next few sessions. The three state-owned fuel retailers continue to be on solid ground, benefiting from the rise in domestic demand for fuels as well as robust core refining and marketing margins, which lend a positive outlook for these stocks in the medium-to-long term. In the absence of major sectoral triggers, shares of oil companies will be steered by prices of crude oil,
news flow, and sentiment in the broader market. Futures contracts of crude oil on both global and domestic exchanges are expected to trade in the red next week as production in the US hit an over two-year high fuelling concerns over glut. Output in the US rose by 79,000 barrels per day to 9.502 mln bpd in the Week ended Aug 11, the Energy Information Administration reported. The uptick US production adds to concerns that the global glut in crude supplies will continue during the second half of the year, as OPEC's (Organization of the Petroleum Exporting Countries) rate of compliance with the global deal to curb production fell in July. Stocks of upstream players such as Oil and Natural Gas Corp and Oil India may react in line with the movement in crude oil prices next week. On technical charts, the two stocks are expected to continue Consolidating. Any major shift in the dollar-rupee exchange rates could also impact stocks 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 pulls down 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 – 21 to 24.08.2017
( www.rupeedesk.in )
After recovering this week from a spell of correction, shares of public sector oil refiners and retailers--Indian Oil Corp, Bharat Petroleum Corp, and Hindustan Petroleum Corp--are expected to strengthen further over the next few sessions. The three state-owned fuel retailers continue to be on solid ground, benefiting from the rise in domestic demand for fuels as well as robust core refining and marketing margins, which lend a positive outlook for these stocks in the medium-to-long term. In the absence of major sectoral triggers, shares of oil companies will be steered by prices of crude oil,
news flow, and sentiment in the broader market. Futures contracts of crude oil on both global and domestic exchanges are expected to trade in the red next week as production in the US hit an over two-year high fuelling concerns over glut. Output in the US rose by 79,000 barrels per day to 9.502 mln bpd in the Week ended Aug 11, the Energy Information Administration reported. The uptick US production adds to concerns that the global glut in crude supplies will continue during the second half of the year, as OPEC's (Organization of the Petroleum Exporting Countries) rate of compliance with the global deal to curb production fell in July. Stocks of upstream players such as Oil and Natural Gas Corp and Oil India may react in line with the movement in crude oil prices next week. On technical charts, the two stocks are expected to continue Consolidating. Any major shift in the dollar-rupee exchange rates could also impact stocks 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 pulls down 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.
