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Informist, Friday, Sept. 5, 2025

NEW DELHI – Oil and gas shares are likely to see minimal traction in the near-term after two weeks of subdued movement, analysts said. "Will wait for some positive momentum or buying traction in the (Nifty Oil & Gas) index, but it has strong support currently," said Osho Krishan, chief manager - technical and derivative research at Angel One. 

Nifty Oil & Gas closed 0.1% higher on Friday at 10,933.70 points. For the week, it gained 1.3%, in line with the benchmark Nifty 50. Only one company in the sectoral index closed in the red for the week, while the remaining 14 closed higher. Gujarat Gas, Gujarat State Petronet, and Indraprastha Gas all closed over 3% higher this week.

"The index is now near its support zone. One should wait for the index to cross 11,200 points to see some positive momentum because, as of now, I don't expect any stock-specific action (in the index)," Krishan said. Shares of Reliance Industries and Oil and Natural Gas Corp. are currently in a consolidation phase. Until the shares of these index and sectoral heavyweights move, Krishan suggested it would be better to stay on the sidelines.

"Some traction can be seen. I am not very bearish (on the index), but will wait for a clear break-through," he said.

Late Wednesday, the GST Council approved a rejig in rates. While taxes on the majority of goods and services have been slashed, taxes on exploration, development, and production of oil and gas have been increased to 18% from 12%.

"... (tax hike) would lead to an increase in the cost of production of crude oil and natural gas," Prashant Vasisht, senior vice president and co-group head, corporate ratings, ICRA, said in a note.

"As crude oil and natural gas are outside the purview of GST, an increase in the cost of production without an offset available on the sale of these products will lead to stranded taxes," he said. Moderating realisations due to a year-on-year fall in crude oil prices, in addition to the increase in cost of production, can be a "double whammy" for the upstream companies, Vasisht said.

West Texas Intermediate crude oil prices have steadied around $63.30 per barrel after a two-day decline as traders are awaiting the outcome of the meeting of the Organization of the Petroleum Exporting Countries and allies, due Sunday. Any further increase in production may intensify downward pressure on prices as the risks of a supply surplus are already elevated, Kotak Securities said, quoting Commerzbank.

TOP HEADLINES

* EIA says US natural gas stocks rise 55 bcf in week ended Aug 29
* US tariff impact on Indian oil imports may be visible from late Sept: Kpler
* Govt reduces domestic natural gas price for Sept by 0.4% to $6.99/mBtu
* ISMA, Roundtable on Sustainable Biomaterials to scale up jet fuel production
* IOC cuts 19-kg LPG cylinder price by INR 51.50 to INR 1,580 in Delhi
* IOC cuts ATF price by INR 1,308.41/kl to INR 90,713.52/kl in Delhi
* Expect Mozambique plant to pump gas from 2028, says ONGC chairman Singh
* RIL bets on new energy, oil-to-chemicals; to invest INR 750 bln in 3 projects
* US natural gas stocks rise 18 bcf in week ended Aug 22, 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 88.27

Reported by Anand JC

Edited by Saji George Titus

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