Oil Stocks Outlook for the week – 15 to 19.05.2017
Oil Stocks Outlook for the week – 15 to 19.05.2017
( www.rupeedesk.in )
Stocks of public sector oil refiners and retailers Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd are expected to have a strong showing next week. These companies are on solid ground and have been benefiting from the rise in 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, stocks of oil companies could be impacted by crude oil prices, news flow, and sentiment in the broad market. Crude oil futures in India and abroad are likely to rise marginally next week as major producers hinted at an extension of the output cut deal beyond the initially agreed six months. To push up prices, the Organization of the Petroleum Exporting Countries and other producers late last year agreed to cut output by 1.8 mln barrels a day for a sixmonth period that ends June. Market participants are now hopeful of an extension of the output cut deal into the second half of the calendar year, as hinted by major producers. OPEC and other major oil producers are scheduled to meet on May 25 to take a decision over whether the production cuts currently in force would be extended beyond June. Also, a fall in US crude oil inventories and output of the oil cartel may lift global prices. However, rising output in the US is likely to cap the upside and prevent a sharp appreciation in prices. Stocks of upstream players such as Oil and Natural Gas Corp Ltd and Oil India Ltd may witness a rise on account of the likely appreciation in oil prices. Any major shift in the dollar-rupee exchange rate can 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 dollars and a weak greenback leads to a decline in 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. As far as technical charts are concerned, the view on refining companies' shares is largely positive. Upstream companies, however, are expected to consolidate.
Source : Cogencis Information Services Ltd.
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Oil Stocks Outlook for the week – 15 to 19.05.2017
( www.rupeedesk.in )
Stocks of public sector oil refiners and retailers Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd, and Hindustan Petroleum Corp Ltd are expected to have a strong showing next week. These companies are on solid ground and have been benefiting from the rise in 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, stocks of oil companies could be impacted by crude oil prices, news flow, and sentiment in the broad market. Crude oil futures in India and abroad are likely to rise marginally next week as major producers hinted at an extension of the output cut deal beyond the initially agreed six months. To push up prices, the Organization of the Petroleum Exporting Countries and other producers late last year agreed to cut output by 1.8 mln barrels a day for a sixmonth period that ends June. Market participants are now hopeful of an extension of the output cut deal into the second half of the calendar year, as hinted by major producers. OPEC and other major oil producers are scheduled to meet on May 25 to take a decision over whether the production cuts currently in force would be extended beyond June. Also, a fall in US crude oil inventories and output of the oil cartel may lift global prices. However, rising output in the US is likely to cap the upside and prevent a sharp appreciation in prices. Stocks of upstream players such as Oil and Natural Gas Corp Ltd and Oil India Ltd may witness a rise on account of the likely appreciation in oil prices. Any major shift in the dollar-rupee exchange rate can 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 dollars and a weak greenback leads to a decline in 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. As far as technical charts are concerned, the view on refining companies' shares is largely positive. Upstream companies, however, are expected to consolidate.
Source : Cogencis Information Services Ltd.