Oil Stocks Outlook
Seen in range; focus on tensions in West Asia
This story was originally published at 19:08 IST on 16 August 2024
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MUMBAI – Shares of oil companies are expected to move in a range next week in the absence of major triggers, analysts said. The movement of crude oil prices will be widely tracked in case of any worsening of the geopolitical crisis in West Asia, they said.
"Markets are closely monitoring the Israel-Iran situation, with reports that US President (Joe) Biden has dispatched three top Middle East advisers to the region to help delay potential Iranian and Hezbollah military retaliation against Israel," Kaynat Chainwala, assistant vice-president of commodity research at Kotak Securities, said.
Oil prices slipped Wednesday on expectations that Iran might refrain from attacking Israel, coupled with the unexpected 1.4-mln-barrel increase in US oil inventories, Chainwala said. However, prices steadied today as tensions in West Asia and easing US recession fears countered the weak Chinese demand outlook, he added. At 1706 IST, the Brent Crude futures on the Intercontinental Exchange were trading 2.3% lower at $79.18 per barrel.
Amid the overall optimism in the stock market owing to favourable data from the US, the Nifty Oil & Gas closed 1.5% higher at 12999.75 points, with 13 of its 15 constituents in the green. Mahanagar Gas, Oil India, and Castrol India were the top gainers in the index. The index is expected to remain rangebound, with the resistance at 13150 points and support at 12600 points.
Valuations of oil-marketing companies are attractive compared to their sectoral peers, but any growth in this sector would be linked to government policy and could be risky, Kranthi Bathini, director of equity strategy at WealthMills Securities, said. The June quarter earnings of the oil-marketing companies were not impressive as their profitability was hit by weak refining and marketing segments, ICICI Securities said in a report.
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Following are the resistance and support levels for oil and gas stocks for next week as per calculations based on their prices on the National Stock Exchange:
| Company | Price | Week-on-week change in % | Resistance | Support |
| Bharat Petroleum Corp | 332.50 | (-)0.30 | 338.50 | 323.00 |
| Hindustan Petroleum Corp | 379.85 | 0.90 | 386.90 | 370.20 |
| Indian Oil Corp | 167.17 | (-)1.10 | 169.10 | 163.90 |
| Oil & Natural Gas Corp | 329.60 | (-)0.90 | 338.40 | 324.20 |
| Oil India | 677.70 | 5.20 | 700.90 | 649.00 |
| Reliance Industries | 2956.40 | 0.30 | 2989.10 | 2899.70 |
| Nifty 50 | 24541.15 | 0.70 | 24795.90 | 24077.10 |
| S&P BSE Sensex | 80436.84 | 0.90 | 81298.80 | 78875.70 |
End
Reported by Noel John
Edited by Rajeev Pai
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