Oil Stocks Outlook
Seen muted next wk on absence of cues; crude prices eyed
This story was originally published at 19:01 IST on 14 November 2024
Register to read our real-time news.Informist, Thursday, Nov. 14, 2024
MUMBAI – With the September quarter earnings season almost coming to an end in India, investors are likely to turn their focus to developments in global markets and the movement in crude oil price next week. Additionally, they will also continue to keep track on the geopolitical tension in West Asia and the possible policies under the Donald Trump administration once he takes charge as the 47th US president in January, analysts said. At 1633 IST, the Brent Crude futures contract traded on the Intercontinental Exchange was 0.4% higher at $72.54 per barrel.
A surge in crude oil could hit the profitability of oil refining companies as it is a key raw material they use. On the other hand, the same could boost the financials of oil manufacturing companies as they can earn higher revenue for the same unit of the commodity sold. State-owned oil refining companies such Bharat Petroleum Corp. Ltd., Hindustan Petroleum Corp. Ltd, and Indian Oil Corp. Ltd posted significantly lower-than-expected earnings for the September quarter due to weak refining margins and rising expenses.
Hardeep Singh Puri, India's oil minister, said Donald Trump's return to power will help bring more energy supplies to the global market and pull oil prices lower, The Economic Times reported Thursday. The Republican candidate, Trump, won the US presidential election last week and analysts said his agenda of increasing oil production in the US would help to bring prices of the commodity lower.
There are also views that Trump's new term may lead to more sanctions on Iran. Iran, the third-largest oil producer among the Organization of the Petroleum Exporting Countries, and its conflict with Israel had pushed crude oil prices higher, primarily due to supply concerns. A Reuters report said Trump's pick of US Senator Marco Rubio for Secretary of State could hint at stricter enforcement of oil sanctions on Iran and Venezuela.
The US is the world's largest producer of crude oil and its Energy Information Administration recently cut its forecast for crude oil prices through the end of next year. This revision was due to lower global demand for the commodity. Also, OPEC made a downward revision in its global crude oil demand growth forecast for the current and next year. For 2024, the growth forecast was cut by nearly 107,000 barrels per day to 1.8 million barrels per day, the cartel said in its October Oil Market report.
On Thursday, Puri said he is not too concerned about OPEC's production cut announcement and is not too concerned by it. He also said major crude oil importing nations should not be impacted by the cartel's production cut as other markets like Brazil and the US will open up, he said on the sidelines of the Confederation of India Industry's 12th PSE Summit. India is the third-largest importer, with around 80% of its energy demands met from overseas imports.
The Nifty Oil & Gas index closed 0.1% lower at 10810.30 points, down for the sixth consecutive session. The Indian equity market will be shut Friday on account of Guru Nanak Jayanti.
TOP HEADLINES
* OPEC actively reviewing decision on production cuts, says Oil Minister Puri
* IOC appoints Arvinder Singh Sahney as chairman effective Wednesday
* Fire at Indian Oil's Mathura refinery leaves eight injured; ops unaffected
* Analyst Concall:ONGC confident KG Basin oil output to be 45,000 bpd FY25-end
* RIL arm signs INR 650 bln MoU with Andhra to set up 500 biogas plants 3 yrs
* PRESS: RIL to set up 500 biogas plants in Andhra, invest INR 650 bln
* Fire at Indian Oil Corp's Gujarat refinery complex; no casualty reported
* Earnings Review: Modest gas, muted oil output drag ONGC top line down 4% YoY
* Balrampur Chini posts loss of INR 35 mln in Jul-Sept vs PAT year ago
* Federation asks govt to up share of ethanol supply from sugarcane in 2024-25
* ETNow: Sources say oil min proposed hiking ethanol prices by INR 4-INR 5/ltr
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:
| Company | Price | Week-on-week change in % | Resistance | Support |
| Bharat Petroleum Corp | 298.20 | (-)4.00 | 309.80 | 290.60 |
| Hindustan Petroleum Corp | 372.40 | (-)2.80 | 386.20 | 358.50 |
| Indian Oil Corp | 134.76 | (-)4.00 | 138.20 | 132.00 |
| Oil & Natural Gas Corp | 250.80 | (-)4.50 | 256.70 | 246.10 |
| Oil India | 475.45 | (-)6.50 | 492.40 | 455.90 |
| Reliance Industries | 1267.60 | (-)1.30 | 1285.30 | 1242.30 |
| NIFTY OIL & GAS | 1267.60 | (-)1.30 | 7757.90 | 7504.00 |
| Nifty 50 | 23532.70 | (-)2.60 | 23756.00 | 23372.50 |
| S&P BSE Sensex | 77580.31 | (-)2.40 | 78317.60 | 77056.20 |
End
US$1 = INR 84.3950
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Reported by Anjana Therese Antony
Edited by Deepshikha Bhardwaj
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