Oil Sector Weekly Report – 13.11.2017 To 17.11.2017

Oil Sector Weekly Report  – 13.11.2017 To 17.11.2017

             Equity Cash/Futures/Options Segment 

Oil Sector Weekly Report  – 13.11.2017 To 17.11.2017

Stocks of state-owned oil refiners and retailers--Indian Oil Corp, Bharat Petroleum Corp, and
Hindustan Petroleum Corp--are expected to trade in a narrow range next week. The stocks of BPCL, Oil India will be focus on next week as the company detailed its earnings. For Jul-Sep, BPCL reported an 80.6% on-year rise in the net profit to 23.57 bln rupees. However, the bottomline was lower than the consensus estimate of 24.14 bln rupees. The refiner's gross refining margin for the
reporting quarter improved to $7.97 per barrel from $3.08 per barrel a year ago, but was lower than expectations of $9-$10 per barrel. In view of BPCL earnings missing estimates, the company's stock may face some selling pressure in early trade on Monday. Stocks of Oil India may gain as the company reported better-than-expected earnings for the September quarter. Net profit rose 11.3% on year to 6.46 bln rupees and the bottomline at 5.08 bln rupees.

In terms of fundamentals, the three state-owned oil marketing companies continue to be on solid
ground, benefiting from healthy domestic demand for fuels as well as robust core refining and
marketing margins, which lend a positive outlook to these stocks. In the absence of any major sectoral triggers, stocks of oil companies are expected to be guided by the movement in crude oil prices, news flow and the broader marker sentiment. Futures of crude oil may continue to rise in both global and domestic exchanges next week, fuelled by tensions in West Asia and expectations that key oil exporters may extend a deal to cut output. The Organisation of the Petroleum Exporting Countries and some other major producers are set to meet on Nov 30, and may discuss extending the agreement to cut output beyond March.

Stocks of upstream players such as Oil and Natural Gas Corp and Oil India may move in line with the
movement in crude oil prices next week. The fundamentals for these stocks have started improving,
as strong oil prices will lead to strong financial performance for upstream companies.

Source : Cogencis Information Services Ltd.
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