Oil Stocks
Outlook for the week – 27 to 31.10.2014
( www.rupeedesk.in )
Stockss of state-owned oil
marketing companies--Indian Oil Corp Ltd, Bharat Petroleum Corp
Ltd and Hindustan Petroleum Corp
Ltd--are seen range-bound next week due to lack of
imminent triggers.
The focus next week, after a
four-day long break due to Diwali holidays, will be on companies
reporting Jul-Sep earnings.
However, the bias is seen positive because of the continued weak
trend in crude oil prices and a
stable rupee vis-a-vis the dollar.
Mostly expect global crude oil
prices to remain weak in near to medium term unless the
Organization of the Petroleum
Exporting Countries decide to cut output.
Since the government has
deregulated diesel prices, the three oil retailers' revenue losses on
controlled fuels will decline
sharply in 2014-15 (Apr-Mar) which will reduce their need for
short-term loans. That will
reduce the interest burden on these companies and lift their
bottomline further. On the other
hand, the upstream companies too are seen trading firm though a
clarification given by the oil
ministry may dampen the sentiment a bit.
Stocks of Oil and Natural Gas
Corp Ltd and Oil India Ltd had gained following the revision of
gas prices, as the two companies
will be the biggest beneficiaries. However, while the trend is still
seen positive, the slightly lower prices than anticipated may weigh on sentiments, leaving the
two stocks oscillating in a range.
