GOLDEN RULES FOR TRADING

Oil Stocks Outlook for the week – 20 to 24.07.2015

Oil Stocks Outlook for the week – 20 to 24.07.2015
(PSU refiners range bound next week)

Stocks of state-owned oil refining and marketing companies may trade in a range next week but the
focus will be on Reliance Industries Ltd as it is scheduled to announce its Apr-Jun earnings on Jul24.
Having gained 7-19% since Jul 1, stocks of Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and
Hindustan Petroleum Corp Ltd are likely to come under some pressure early next week as investors
may chose to book profits.

However, continued decline in oil prices and robust global refining margins may provide support on
the downside. With sanctions on Iran set to go, oil prices are expected to continue trending lower, a
positive for these three companies. The Indian basket of crude declined to $56.3 a barrel this week
from nearly $58.00 last Friday. It was close to $62 at the beginning of this month.

Also, lifting of international sanctions on Iran will help India import more from the country and put
pressure on other west Asian nations to reduce the "Asian premium" being charged to Indian
companies.

RIL stocks would also closely follow trend in refining margins and oil prices. The company is
expected to report gross refining margin of over $9 a barrel for Apr-Jun, up from $8.7 a year ago.

The company's net profit is seen growing 7% year-on-year to 60.3 bln rupees. It will detail earnings
post market hours next Friday but its stocks may trade in positive zone in anticipation of a strong
performance.

Stocks of Oil and Natural Gas Corp Ltd and Oil India Ltd will remain under pressure in the near
term as the decline in oil prices will hit their bottomline.