*Oil Stocks Outlook for the week (04-08.06.2012) * Stocks of oil marketing companies will track announcement of a possible petrol price cut as well as crude prices and rupee-dollar movement next week, but may remain mostly in range. With Finance Minister Pranab Mukherjee stressing on efforts to reduce the burgeoning fiscal deficit by cutting government expenditure and subsidies, the market is hoping that government may soon take a call on raising diesel and cooking gas prices.
Currently, the three state-owned oil marketing companies--Indian Oil Corp Ltd, Hindustan Petroleum Corp Ltd and Bharat Petroleum Corp Ltd--are losing revenue worth 4.57 bln rupees daily on sale of fuels at subsidised rates. A cut in petrol prices, due to decline in crude prices, though may have a momentary negative impact on the stocks. The companies are widely expected to announce an over 1.60 rupees per litre cut in the price of petrol soon. Crude oil prices, however, continued to often, which eased the pressure on these oil companies. India's crude oil basket hit a seven-year low of $101.63 a barrel on Thursday, down significantly from the average of $118.04 in April and $108.13 in May. The rupee though continues to remain volatile against the dollar. After pulling up initially in the week, it slid back to 56.23 for a dollar on Wednesday and recovered to end at 55.54 today. At current levels, a change of every one rupee in the value of dollar is equivalent of $3 per barrel change in crude prices for Indian oil companies, as they import most of their requirement. Stocks of upstream major Oil and Natural Gas Corp and refining and exploration major Reliance Industries are seen positive in the near term because of attractive valuations. While there are concerns for ONGC because of declining crude oil production from its domestic assets and rise in share of revenue losses of oil marketing companies, these negatives have mostly been priced in the stock. Easing crude prices also augur well for the company as it will help in improving net realisation. Over the last few weeks, Reliance Industries stocks have been supported by aggressive buying at below 700 rupees by the company under its ongoing buyback of stocks at up to 870 rupees each By RUPEE DESK [email protected] -- You received this message because you are subscribed to the Google Groups "Kences1- Rupeedesk" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/kences1?hl=en.
