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Informist, Friday, Nov. 8, 2024

MUMBAI - Shares of Indian oil companies may continue their southward journey next week too, amid the anticipation that the administration under the to-be president of the US, Donald Trump, could push crude oil prices as well as inflation higher. "Trump's term could see changes in trade policies, immigration laws, corporate taxes, among others...while these can be a big boost to the US economy, it will also lead to higher inflation which the Fed have been trying to bring under control," a research analyst at a domestic broking firm said. 

As increasing US oil production is among one of the many agenda of Trump, along with imposing more restrictions on Iran which is one of the major global crude oil producers, this can put pressure on global crude oil prices, the analyst said. Iran produces about 3% of total crude oil output globally. As a result, this could have a ripple effect on India which is a net importer of crude oil.

The geopolitical tension in West Asia had pushed global crude oil prices significantly higher, especially in April where the price had crossed above the $90-per-barrel mark after the conflict between Israel and Iran aggravated. Adding to the woes, the Organization of the Petroleum Exporting Countries and its allies announced a reduction in their production.

However, prices started to ease after some allies of the cartel said they may increase their output and as the tension between Iran and Israel did not lead to a full-fledged war. At 2135 IST, the Brent Crude futures contract was down 2.4% at $73.82 per barrel. 

With respect to earnings, investors will closely watch the earnings of Oil and Natural Gas Corp due Monday. Lower oil and gas production is expected to hit the quarterly financials of the company. Its net profit is seen falling over 8% on year to INR 93.68 billion and revenue is expected to decline 3.5% to INR 339.34 billion, according to the average of estimates from 11 broking firms. Sequentially, the bottom line is seen rising 4.8% and revenue may fall nearly 4%. ONGC's oil price realisation, adjusted for special additional excise duty, may increase to $75.8 per barrel in Jul-Sept, ICICI Securities said in its earnings preview report. 

Shares of ONGC closed 1% lower at INR 262.55 on the National Stock Exchange, down for the second straight session. The stock fell for three months from August, falling nearly 20% during this time period, and extended losses to November as well.

TOP HEADLINES

* ETNow: Sources say oil min proposed hiking ethanol prices by INR 4-INR 5/ltr
* Earnings Outlook: ONGC Jul-Sept EBITDA to decline on lower oil, gas output
* Oil India wins bid for graphite, vanadium mineral block in Arunachal Pradesh
* Vortexa's Huang sees India crude oil imports rising Nov on improved demand
* Analyst Concall: Oil India to raise Numaligarh refinery capex to INR 320 bln
* Oil cos buy 5.85 bln ltr ethanol in Nov-Sep, achieve 13.8% blending
* Earnings Review: Oil India Jul-Sept net dips 32% YoY on like-to-like basis
* Earnings Outlook: Increased output to boost Oil India Jul-Sept net profit
* NTPC, ONGC arms form 50:50 joint venture for renewable energy projects

Following are the resistance and support levels for the sector's key stocks for next week, as per calculations based on their prices on the National Stock Exchange:

End

Reported by Anjana Therese Antony
Edited by Akul Nishant Akhoury

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