Oil Stocks Outlook for the week - 11 to 15.09.2017
Oil Stocks Outlook for the week - 11 to 15.09.2017
( 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 after witnessing a spell of correction over the past few sessions. As far as fundamentals are concerned, 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, an analyst tracking the petroleum sector said. In the absence of major sectoral triggers, shares of oil companies are likely to be influenced by prices of crude oil, news flow, and sentiment in the broader market. Back-to-back hurricanes across the US are likely to push crude oil futures on local and global exchanges in the negative next week. Hurricane Irma, the most powerful storm recorded in the Atlantic Ocean, is set to reach Florida this weekend. The hurricane in the Caribbean may interrupt crude shipments in and out of the US. Hurricane Harvey in the US last week had pushed up oil inventories by 4.6 mln bbl in the week ended Sep 1. Hurricane Harvey had led to flooding and destruction in Texas and Louisiana. It caused refinery outages, production cuts and pipeline closures in the oil producing region. The return of Libya's largest oilfield Sharara to production may also weigh on prices. The oilfield was shut for more than two weeks as a pipeline was shut by an armed group. However, reports that Saudi Arabia will cut oil allocations to its customers by 350,000 bpd in October might limit the losses. 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 rate 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 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 - 11 to 15.09.2017
( 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 after witnessing a spell of correction over the past few sessions. As far as fundamentals are concerned, 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, an analyst tracking the petroleum sector said. In the absence of major sectoral triggers, shares of oil companies are likely to be influenced by prices of crude oil, news flow, and sentiment in the broader market. Back-to-back hurricanes across the US are likely to push crude oil futures on local and global exchanges in the negative next week. Hurricane Irma, the most powerful storm recorded in the Atlantic Ocean, is set to reach Florida this weekend. The hurricane in the Caribbean may interrupt crude shipments in and out of the US. Hurricane Harvey in the US last week had pushed up oil inventories by 4.6 mln bbl in the week ended Sep 1. Hurricane Harvey had led to flooding and destruction in Texas and Louisiana. It caused refinery outages, production cuts and pipeline closures in the oil producing region. The return of Libya's largest oilfield Sharara to production may also weigh on prices. The oilfield was shut for more than two weeks as a pipeline was shut by an armed group. However, reports that Saudi Arabia will cut oil allocations to its customers by 350,000 bpd in October might limit the losses. 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 rate 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 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.
