Oil Stocks
Outlook for the week – 03 to 07.11.2014
( www.rupeedesk.in )
Stocks of the state-owned oil
marketing companies is likely to remain subdued next week, which
has only three trading sessions.
Focus will be on companies reporting earnings; weak crude
prices will keep the momentum
positive though. The stock market will stay closed on Tuesday
for Moharram and Thursday for
Gurunanak Jayanti.
None of the three companies --
Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan
Petroleum Corp Ltd -- is
reporting earnings next week.
Easing crude prices and a
favourable foreign exchange environment have lifted the financials of
these companies as subsidies have
come down drastically.
The companies cut diesel prices
by 2.25 rupees per ltr and petrol prices by 2.4 rupees per ltr, ex-
Delhi, on Friday due to the
continued decline in international prices of both the fuels. The rupeedollar
rate has also remained stable
over the last two Weeks, further reducing the effective prices
of these fuels.
As the global crude oil prices
are expected to trend lower in the near to medium term, the overall
subsidies on cooking gas and
kerosene may decline, easing the losses of these companies in the
current financial year.
For most of Jul-Sep, the three
companies made good profits on diesel, which was deregulated
earlier this month. Owing to
state elections in Maharashtra and Haryana, the government could
not revise the prices, allowing
the companies to earn almost 3 rupees per ltr at one point in time.
Further, the broad market is
expected to extend its bull run next week on the back of buoyant
foreign fund flows which will
also boost the stocks of oil companies, including Oil and Natural Gas Corp Ltd and Oil India Ltd.
