Oil Stocks Outlook
Seen muted next week; medium-term outlook positive
This story was originally published at 21:01 IST on 13 December 2024
Register to read our real-time news.Informist, Friday, Dec. 13, 2024
MUMBAI – Shares of oil companies are expected to move in a tight range next week in the absence of major triggers in the market. For oil marketing companies, some analysts tracking the sector sounded optimistic owing to the stability in crude oil prices and expectations of better earnings growth in the coming quarters. The movement of global crude oil prices will be closely watched as it could affect shares of upstream as well as downstream companies in India.
A fall in crude oil prices could boost the profitability of oil-refining companies, but such a fall could hit the financials of exploration and production companies. Shares of state-owned oil-marketing companies such as Bharat Petroleum Corp. Ltd., Hindustan Petroleum Corp. Ltd., and Indian Oil Corp. Ltd. gained this week, while those of upstream players such as Oil India Ltd., Reliance Industries Ltd., and Oil and Natural Gas Corp. Ltd. fell.
"We expect crude oil prices to average in the $80-85 per barrel range in fiscal 2025, compared with $82.7 per barrel on average in the previous fiscal," CRISIL Market Intelligence & Analytics said in its report. At 2018 IST, Brent Crude futures on the Intercontinental Exchange were up 0.7% at $73.88 per barrel. The continuing war between Russia and Ukraine and the geopolitical tensions in West Asia have been on investors' radar for a long time now. These conflicts have caused worries about the global supply of crude oil. Russia is a major exporter of the commodity and Iran is the fourth-largest producer of crude oil in the Organization of the Petroleum Exporting Countries. Any disruption in these countries can result in a surge in global crude oil prices.
Reports quoting US Treasury Secretary Janet Yellen said the US is looking to impose further sanctions on Russia in an attempt to reduce the country's oil revenue. European Union ambassadors agreed on a new package of sanctions against Russia, targeting the so-called shadow fleet the Kremlin has been using to trade oil despite the sanctions already in force, a Dow Jones Newswires report said. Analysts said the news about more sanctions pushed global crude oil prices higher Friday.
However, OPEC cut its forecast for growth in global crude oil demand for 2024 and 2025, which capped the rise in crude oil prices. The crude oil cartel sees demand for the commodity in 2025 rising by 1.4 million barrels per day, down by 90,000 barrels per day from an earlier estimate a month ago.
Shares of Reliance Industries were among the major oil stock laggards this week. On Friday, the stock snapped a five-day winning run and closed 0.8% higher at INR 1,272.85 on the National Stock Exchange. The company, after market hours Friday, said it had acquired 74% stake in Navi Mumbai IIA Pvt. Ltd. for INR 16.28 billion.
TOP HEADLINES
* IEA sees global oil demand rising by 1.1 mln bpd to 103.9 mln bpd in 2025
* HPCL to commission Gujarat LNG unit by Jan-end, say sources
* PRESS: IOC's GIFT City unit raises over $250 mln in a year for group cos
* EIA sees global oil output rising 1.6 mln bpd 2025, led by non-OPEC nations
* RIL says NCLT OKs arm's resolution plan for Karkinos Healthcare
* OPEC trims 2024, 2025 crude oil demand growth forecasts further downward
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:
| Company | Price | Week-on-week change in % | Resistance | Support |
| Bharat Petroleum Corp. | 301.70 | 0.50 | 310.10 | 291.80 |
| Hindustan Petroleum Corp. | 415.05 | 4.00 | 422.80 | 405.60 |
| Indian Oil Corp. | 144.24 | 1.60 | 147.60 | 139.20 |
| Oil & Natural Gas Corp. | 254.25 | (-)2.20 | 260.80 | 246.20 |
| Oil India | 454.35 | (-)4.30 | 479.30 | 438.70 |
| Reliance Industries | 1272.85 | (-)3.00 | 1298.20 | 1227.00 |
| Nifty 50 | 24768.30 | 0.40 | 25192.00 | 23969.00 |
| S&P BSE Sensex | 82133.12 | 0.50 | 83607.70 | 79345.50 |
End
US$1 = INR 84.78
Reported by Anjana Therese Antony
Edited by Rajeev Pai
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2024. All rights reserved.
To read more please subscribe
Share this Story:
