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Informist, Friday, Apr. 11, 2025

MUMBAI – Shares of oil companies are likely to take cues from developments on tariff policies and the movement in global crude oil prices next week. Though the US announced a 90-day pause on tariffs imposed on most of its trading partners, the exclusion of China and further retaliation from Beijing will remain in focus. In the latest development, China increased tariffs on US goods to 125% from 84% earlier. 

At 1715 IST, Brent crude June futures traded on the Intercontinental Exchange was largely unchanged at $63.32 per barrel. Crude oil prices had fallen to a four-year low of $58.40 per barrel on Tuesday as supply worries eased after the Organization of Petroleum Exporting Countries and its allies announced raising their output. The latest announcement of a 90-day pause in tariffs by the US also contributed to the fall in prices, an analyst tracking the sector said. 

Downstream oil companies are likely to report "not-so-good" results in the March quarter due to weak gross refining margins and liquified petroleum gas losses. Elara Securities expects gross refining margins of refiners to average $5.4 per barrel in Jan-Mar compared to $5 per barrel a quarter ago and $9.4 a barrel a year ago. The broking firm is, however, optimistic about the performance of these companies in 2025-26 (Apr-Mar) due to the sharp fall in crude oil prices. A fall in the commodity's price below $60 per barrel would add INR 900 billion of cumulative operating profit of oil marketing companies in the current financial year, it said. Recently, Morgan Stanley said Indian refiners are among the best positioned globally to benefit from a well-supplied oil market.

Kotak Institutional Equities has a 'sell' rating on oil refiners such as Bharat Petroleum Corp., Hindustan Petroleum Corp. and Indian Oil Corp. due to the lack of pricing freedom of these companies. On Monday, the government increased the special additional excise duty on petrol and diesel by INR 2 per litre each. However, the government said that state-owned oil marketing companies will not increase the retail prices of petrol and diesel. "As oil prices had moderated and retail auto fuel prices were frozen, OMCs (oil marketing companies), were as such, making much higher than normative marketing margins on auto fuels," the broking firm said. "While (retail) price cuts will be lower, the benefit to OMCs will be partly offset by continuing losses on LPG," Kotak said. 

TOP HEADLINES
* US EIA lowers crude oil demand growth, price forecasts for 2025, 2026
* SC upholds rejection of customs duty demand on naphtha imports by RIL
* WTI crude sinks to 4-year low of $57.05/bbl on demand woes, US tariff impact
* BPCL, Sembcorp Green Hydrogen ink JV for renewable energy, green hydrogen
* IOC signs MoUs with Odisha govt to set up projects worth INR 1.19 trillion
* See INR-320-bln revenue from excise duty hike on petrol, diesel - Oil secy
* Retail oil prices may fall if crude stays in $60-$68/bbl range - Oil minister
* Govt ups excise duty on petrol, diesel; PSU oil cos to not hike retail price

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 Anjana Therese Antony
Edited by Saji George Titus

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