More Stories

Informist, Friday, Mar. 28, 2025

MUMBAI – Shares of upstream and downstream oil companies are likely to remain in a thin range next week, in the absence of key triggers. Investors will continue to track global crude oil prices, which have been rising for three weeks now. The US' policies on increasing its oil production and putting pressure on other sources, such as Venezuela, were among the prime reasons that pushed in global crude oil prices higher.

Early this week, US President Donald Trump announced that any country that buys oil or gas from Venezuela will pay a 25% tariff on any trades made with the US. He also announced a 25% tariff on all auto imports from Wednesday and said that a similar levy would be imposed on imports of auto parts, which will be announced before May 3.

However, analysts said that Trump's latest tariff on foreign-made vehicles imported into the US could dent demand for crude oil and thus limit its price rise. At 1648 IST, the Brent crude oil futures traded on the Intercontinental Exchange were down 0.2% at $73.79 per barrel, but 2.3% higher than $72.16 per barrel a week ago.

New upstream oil and gas projects may have limited value propositions, given risks from precarious oil demand-supply balance in light of uncertain global demand growth, electrification, and decarbonisation of the key transportation sector, Kotak Institutional Equities said in its strategy report. "Anyway, India's upstream sector has seen limited success over the past several years, with ONGC (Oil and Natural Gas Corp.) seeing a sharp decline in production, despite continued large investments in exploration capex (capital expenditure)," the broking firm said. ONGC may have written off as much as 87% of its exploration capital expenditure over 2006-07 (Apr-Mar) and FY24, it said in the report. 

On Friday, shares of ONGC closed nearly 2% higher at INR 246.38 after Jefferies maintained its "buy" rating, with a target price of INR 375. "Stock is discounting $55 per barrel crude, making risk-reward favourable," the broking firm said. The UK-based BP's success at Iraq's Rumalia Oil Field also anchors ONGC's outlook, it said. Meanwhile, Business Standard, citing sources, reported that Saudi Aramco is in discussions to invest in a proposed ONGC refinery in Gujarat.

In the case of downstream players, Kotak Equities expects limited opportunities for private companies, given the large refinery capacity addition globally in the medium term leading to supply-demand mismatch and likely peaking of global oil demand over the next few years. For state-owned refiners, they are adding refining capacities despite weak refining margins in recent years, it said. 

TOP HEADLINES
* US natural gas stocks rise by 37 bcf in week ended Mar 21, says EIA
* ONGC to invest INR 33 bln in ONGC Green via subscription to rights offer
* RIL invests INR 8.62 mln in REC Sustainable Energy Solutions
* IEA says global energy demand up 2.2% in 2024, led by power sector
* Trump to impose 25% tariff on nations buying Venezuelan oil, gas from Apr 2
* Kotak Equities cuts FY26, FY27 crude price view, EBITDA estimate for oil cos
* PRESS: Oil imports from Russia rebound in March amid abundant supply
* US natural gas stocks rise by 9 bcf in week ended Mar 14, says EIA

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 85.47

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Anjana Therese Antony

Edited by Nishant Maher

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.