Oil Stocks Outlook for the week (18-22.06.2012)

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Jun 18, 2012, 5:35:02 AM6/18/12
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RUPEE DESK: Oil Stocks Outlook for the week (18-22.06.2012)

 

Stocks of the three state-owned oil marketing companies--Indian Oil Corp Ltd, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd--could be under pressure next week, as the companies are soon expected to announce another cut in the prices of petrol. After the highest ever price hike of around 7 rupees per ltr in May, oil companies announced around 2-rupee per ltr cut in prices of petrol on Jun 3.


Price of the Indian crude oil basket has fallen to under $96 per barrel now from $98.49 per barrel at the beginning of the month, while the dollar-rupee exchange rate has remained rangebound leading to talks to cut in petrol prices. The state-owned companies review prices and revenue loss on the sale of fuels every fortnight.


However, in case the Reserve Bank of India announces a rate cut, as expected, on Monday, the shares of oil marketing companies may just be able to offset losses from the possible petrol price cut. The central bank will announce its mid-quarter monetary policy review on Monday.


BPCL may outperform its peers next week as the company Monday announced a third gas discovery in an offshore block in Mozambique, where it hold 10%
stake. Indian currency has depreciated by over 8% to a US dollar since Apr 1.

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