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Informist, Friday, Aug 23, 2024

MUMBAI – Shares of oil and gas companies are expected to rise further next week on the back of largely stable crude oil prices and positive cues from global markets. However, gains will likely be capped as weak June quarter earnings of oil marketing companies and concern about ongoing geopolitical issues continue to dent sentiment towards the sector, analysts said.

Markets continued to monitor progress in West Asia after Israel accepting a proposal to tackle disagreements blocking a ceasefire deal in Gaza eased supply concerns, investment bank Pantomath Capital Advisors said in a note. "However, an agreement between Israel and Hamas remains elusive. China's economic weakness also continued to weigh on the demand outlook," it said. Crude oil prices have been trading in a range amid geopolitical tensions and fears of an economic slowdown. But these were largely in a range this week. 

While most sectors reported muted to strong earnings growth for Apr-Jun, the oil and gas sector posted an on-year decline. In the June quarter, the oil and gas sector reported a sequential fall in both net profit and earnings before interest, taxes, depreciation, and amortisation, primarily dragged down by weak performance of oil marketing companies, Prabhudas Lilladher said in a strategy report.

The operating profit of oil marketing companies fell on quarter due to weak refining performance amid a decline in product cracks and weak marketing margins with under-recoveries on liquefied petroleum gas sales, Prabhudas Lilladher said. Going forward, the refining margins of oil marketing companies are expected to remain low owing to weak product cracks, while gross marketing margins are likely to be moderate, it said.

The Nifty Oil & Gas index ended 0.7% lower at 13140.45 points today. This week, shares of Hindustan Petroleum Corp and Aegis Logistics were the top gainers in this index, while those of Oil and Natural Gas Corp and Indraprastha Gas were the worst hit.

TOP HEADLINES

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* GAIL, Petron to set-up 500,000 tn bio-ethylene plant via 50:50 JV
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* ONGC to pay 863 mln rupees for ONGC Petro share warrant conversion
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* Petronet LNG to supply LNG to Sri Lanka's LTL Holdings for 5 years
* REC Power sells two small subsidiaries to Power Grid Corp
* Power Grid Corp acquires Rajasthan IV E Power Transmission
* DCM Shriram commissions new hydrogen peroxide plant in Gujarat
* Adani group firms' Apr-Jun EBITDA at 225.7 bln rupees, up 33% YoY
* PRESS: Adani Power in talks to buy 600-MW Butibori project in Nagpur
* CESC arm incorporates subsidiary to explore renewable power space
* Govt cuts windfall gains tax on domestic crude oil to 2,100 rupees/tn
* Coal India mulls passing on older royalty cost to consumers - source
* Oil cos buy 4.6 bln ltr ethanol in Nov-Jul, achieve 13.3% blending

Following are the resistance and support levels for the stocks for next week as per calculations by Informist based on their prices on the National Stock Exchange:

End

Reported by Alina Geogy

Edited by Akul Nishant Akhoury

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