Oil Stocks Outlook: Oil marketing cos shrs to stay feeble next wk

[B. Karthick]

Oil Stocks Outlook: Oil marketing cos shrs to stay feeble next wk
Saturday, Jun 28.

The slide in shares of state-run oil marketing companies is
expected to continue next week with broader markets showing no signs
of
recovery, and global prices scaling record highs.
It's a double whammy for the oil marketing stocks. But the most
worrying
factor continues to be the relentless rise in global oil prices.
The benchmark crude oil contract for August delivery today hit a
new
all-time high of $142.12 a barrel on the New York Mercantile Exchange.
The rise comes close on heels of Organisation of Petroleum
Exporting
Countries President Chakib Khelil's prediction that oil prices could
rise to
$150-$170 a barrel in next few months.
Crude oil is expected to see continued bullishness on investment
demand
and could touch $145 next week.
We says that the rising crude oil prices will continue to put
pressure
on the marketing companies as the government is unlikely to go for a
second
round of fuel price hike to bail out the companies.
Thursday Finance Minister P. Chidambaram said that there was no
scope for another round of price hike given the double-digit inflation
rate.
Earlier this month, the government raised retail prices of petrol
by 5
rupees per 1 L, diesel by 3 rupees and cooking gas by 50 rupees a
cylinder.
Weakness in broader indices is also having its bearing on the oil
stocks.

Below are Friday's closing share prices, in rupees, of leading oil
companies on the National Stock Exchange, compared with a week
earlier:

Company Closing price Closing price %
Change
Jun 27 Jun 20

Oil and Natural Gas Corp 832.50 867.65 (-)
4.1
Indian Oil Corp 341.10 369.30 (-)
7.6
Bharat Petroleum Corp 247.75 264.65 (-)
6.4
Hindustan Petroleum Corp 185.70 195.65 (-)
5.1
Reliance Industries 2,182.65 2,099.20
4.0
Cairn India 275.10 268.20
2.6

Nifty 4136.65 4347.55 (-)
4.9
Sensex 13802.22 14571.29 (-)
5.3

End

K.Karthik Raja,
Research Dept.