GOLDEN RULES FOR TRADING

Oil Stocks Outlook for the week – 11 to 15.01.2016 (Refining companies shares seen up)

Oil Stocks Outlook for the week – 11 to 15.01.2016
(Refining companies shares seen up)

Shares of crude oil refining companies may remain buoyant in the
near term as the continued fall in oil prices is likely to further boost
refining margins.

But gains may be capped due to concerns over inventory losses, specially
for Indian Oil Corp Ltd and Hindustan Petroleum Corp Ltd, as a sharp
fall in oil prices may reduce the value of their stored products and raw
material. The Indian crude basket slipped below $30 a barrel this week.
Since Jan 1, it has fallen over 12%.

The low oil prices will continue to weigh on the shares of upstream
companies Oil and Natural Gas Corp Ltd and Oil India Ltd. The outlook
for oil prices remains weak as supplies continue to be at elevated levels
while major consuming economies like China are facing slowdown.
HPCL is coming out of the consolidation seen from August onwards.

RELIANCE has been outperforming the broad market, with gross
refining margins moving to historically high levels. Several of the
company's expansion projects, which will come on stream this year, are
expected to boost its earnings.

In a report on Wednesday, CLSA India said it expects RIL's operating
profit to increase by over 50% to $10 bln by 2017-18 (Apr-Mar), driven
by expansion of its refining and petrochemicals businesses.