More Stories

Informist, Friday, Feb. 21, 2025

MUMBAI – In the absence of major triggers, shares of oil companies are likely to be range bound next week, analysts said. The near-term outlook for both upstream and downstream companies is bearish amid falling crude oil prices and weak refining margins. Crude oil prices have eased from peak levels in the beginning of the year, but the refining margins of oil marketing companies have not improved, which will affect their profitability in the current quarter, analysts said.

The 18% cut in liquified petroleum gas subsidies is also hurting the Indian oil marketing companies, they said. For the nine months ended December, the under-recovery of Indian Oil Corp. was INR 143.25 billion, Bharat Petroleum Corp. Ltd. was INR 72 billion, and Hindustan Petroleum Corp. Ltd. was INR 76 billion, aggregating to INR 300 billion. Under recoveries are losses incurred by oil refiners while selling their products at subsidised prices or lower than their cost.

Earlier this month, oil marketing companies had asked the distillers to supply 1.64 billion litres of ethanol in Feb-Apr and May-Jul of ethanol supply year ending October. For the month of January, these companies achieved a 19.6% ethanol blending with petrol, according to the Petroleum Planning & Analysis Cell. Blending of ethanol will help these companies to ease some presure on margins, analysts said. Refiners blend ethanol with petrol to reduce their reliance on crude oil imports and to lower carbon emissions. 

BPCL has signed pact with Petrobras for the supply of Brazilian crude oil grade. The pact was likely made to mitigate the insufficient number of Russian crude cargos for its March delivery. However, Brazilian crude will not be as cheap as the Russian one, which may further impact the company's margins, an analyst said.

This week, Brent crude oil futures rose after falling a week ago. At 1552 IST, Brent crude futures traded on the Intercontinental Exchange were down 0.8% at $75.89 per barrel. The rupee remained largely stable during the week and closed at INR 86.71 per dollar Friday.

The Nifty Oil & Gas index closed 1.1% lower at 10074.20 points, with 12 of its 15 constituents in the red. However, the index rose more than 2% this week. Except Oil India, all the major oil stocks rose this week and the top gainers were Oil and Natural Gas Corp., BPCL, and HPCL.

TOP HEADLINES
* Agarwal Industrial inks agreement with BPCL to supply bulk bitumen
* Potential hit to revenue may keep fuel out of GST net, fin min officials say
* PRESS: HPCL plans capex of INR 900 bln by 2030, to focus on green energy
* Oil cos' ethanol blending at 19.6% Jan, cumulative blending since Nov 17.4%
* BPCL signs MoUs to boost ethanol production, strengthen renewable energy ops
* ONGC, Mangalore Refinery, Azerbaijan-based co ink tripartite MoU
* RIL buys 100% stake in Lakadia B Power Transmission for INR 67.3 mln
* Shipping Corp, BPCL ink MoU for strategic alliance in shipping sector
* In win for govt, HC junks arbitral award favouring RIL in gas migration case

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 Akshay V. Johnson
Edited by Deepshikha BHardwaj

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.