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Informist, Friday, Jan. 10, 2025

MUMBAI – The fate of Indian oil companies' shares next week will likely be determined by the movement in global crude oil prices, level of the rupee, and expectations from the December quarter earnings. The Brent Crude futures were stable last week after rising significantly in the weeks prior. At 1555 IST, Brent Crude futures traded on the Intercontinental Exchange were up 2% at $78.73 per barrel. Also, the rupee hit an all-time low of INR 85.97 per dollar Friday. 

The rise in crude oil prices and depreciation of the rupee will hit oil marketing companies, whose key raw material is crude oil, which is mostly imported. On the other hand, upstream companies could see a boost as higher crude oil prices mean better realisations.

The oil sector's performance in the December quarter is expected to be a mixed bag, with oil marketing companies witnessing a sequential improvement because of stronger gross refining margins as well as marketing margins. Upstream companies are expected to report subdued earnings for the December quarter due to the decline in net crude oil realisations. The average Singapore gross refining margin for the December quarter was $5 per barrel, the highest in three quarters. The average Brent Crude price for the December quarter was $74 per barrel, down from $78 in the previous quarter.

On Friday, the Nifty Oil & Gas index closed 1% lower at 10740.60 points, with 13 out of 15 constituents in the red. Oil and Natural Gas Corp. was the only major stock in the Oil & Gas index that rose over the week. Earlier this week, shares of ONGC had reached a two-month high of INR 267.40 after the brokerage firm CLSA upgraded it to 'high conviction outperform' and set the target price at INR 360. Among major laggards were downstream players such as Hindustan Petroleum Corp. and Bharat Petroleum Corp., which fell around 6% each this week.

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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

US$1 = INR 85.97

Reported by Akshay V. Johnson

Edited by Deepshikha Bhardwaj

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