Oil Stocks Outlook for the week – 02 to 05.05.2017
Oil Stocks Outlook for the week – 02 to 05.05.2017
( www.rupeedesk.in )
Stocks of public sector oil refining and retailing companies--Indian Oil Corp Ltd, Bharat Petroleum CorpLtd, and Hindustan Petroleum Corp Ltd--are likely to see some weakness next week primarily dueto profit booking.In terms of fundamentals, however, these three companies are on solid ground and have been benefitting from rising domestic demand for fuels and robust refining and marketing margins, which lends them a positive outlook for the medium to long term.In the absence of any major sectoral triggers, crude oil prices, news flow and the broad market sentiment could impact the shares of oil companies. Global crude oil futures are seen in the red next week as high stockpiles and rise in production in the US steal the spotlight from major producers' efforts to rein in the existing glut. Doubts over the extension of the output cut deal between the Organization of the Petroleum
Exporting Countries and other major producers beyond June are also keeping markets on the
tenterhooks.OPEC and other producers had agreed to cut output by 1.8 mln barrels per day in Jan-Jun. Prices are likely to remain subdued as they have lost the impetus due to the rise in output in the US and other non-OPEC countries, and as Libya's oilfields have reopened.Stocks of upstream players such as Oil and Natural Gas Corp Ltd and Oil India Ltd may witness negativity on account of the weakness in oil prices. If the dollar weakens against the rupee, it could add to the woes of upstream companies' stocks. This is because these companies price oil and gas in dollars and a weaker greenback means lower 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.On the other hand, the prospects for upstream stocks ONGC and Oil India seem to have rightened up on charts after a dull spell. The immediate term outlook for these stocks is positive and a bounce-back can beexpected.
Source : Cogencis Information Services Ltd.
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Oil Stocks Outlook for the week – 02 to 05.05.2017
( www.rupeedesk.in )
Stocks of public sector oil refining and retailing companies--Indian Oil Corp Ltd, Bharat Petroleum CorpLtd, and Hindustan Petroleum Corp Ltd--are likely to see some weakness next week primarily dueto profit booking.In terms of fundamentals, however, these three companies are on solid ground and have been benefitting from rising domestic demand for fuels and robust refining and marketing margins, which lends them a positive outlook for the medium to long term.In the absence of any major sectoral triggers, crude oil prices, news flow and the broad market sentiment could impact the shares of oil companies. Global crude oil futures are seen in the red next week as high stockpiles and rise in production in the US steal the spotlight from major producers' efforts to rein in the existing glut. Doubts over the extension of the output cut deal between the Organization of the Petroleum
Exporting Countries and other major producers beyond June are also keeping markets on the
tenterhooks.OPEC and other producers had agreed to cut output by 1.8 mln barrels per day in Jan-Jun. Prices are likely to remain subdued as they have lost the impetus due to the rise in output in the US and other non-OPEC countries, and as Libya's oilfields have reopened.Stocks of upstream players such as Oil and Natural Gas Corp Ltd and Oil India Ltd may witness negativity on account of the weakness in oil prices. If the dollar weakens against the rupee, it could add to the woes of upstream companies' stocks. This is because these companies price oil and gas in dollars and a weaker greenback means lower 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.On the other hand, the prospects for upstream stocks ONGC and Oil India seem to have rightened up on charts after a dull spell. The immediate term outlook for these stocks is positive and a bounce-back can beexpected.
Source : Cogencis Information Services Ltd.