“Oil prices rose 3% on Monday, hitting the highest since early July 2015, as Saudi Arabia's crown prince cemented his power over the weekend with an anti-corruption crackdown, while the US rig count fell and markets continued to tighten,” the Reuters report suggests. CLCIK HERE TO READ FULL REPORT
Oil India hit a 52-week high of Rs 382, up 3% on the BSE in intra-day trade, while ONGC rallied 3.5% to Rs 205.50 extending its 16% surge of the last one-month on the BSE. The stock is trading close to its 52-week high of Rs 212 touched on January 31, 2017 in intra-day trade.
Selan Exploration Technology (up 5% at Rs 259), Aban Offshore (up 3.5% at Rs 227), Jindal Drilling & Industries (4% at Rs 174) and Hindustan Oil Exploration (up 3% at Rs 110) from the private sector, trading higher in the range of 3% to 5%, as compared to 0.31% rise in the benchmark S&P BSE Sensex at 09:41 AM.
Higher crude prices will result in higher realisation for these oil exploration companies and result in increased profitability for them.
“While crude prices may inch higher to $65/bbl we do see chances of subsidy being imposed and hence do not see net realisations crossing $60/bbl, increase in gas prices from current $2.5/mmbtu to >$3/mmbtu by FY19E, production growth of 3% CAGR over FY17-19E – led largely by increase in gas production of 5% CAGR and increase in ONGC Videsh’s (OVL) earnings from Rs 1.3/share to Rs 2.8/share / FY19E,” the brokerage firm said in recent report on the company’s one-year outlook. It recommends ‘buy’ rating on the stock with 1-year target price of Rs 241 per share.
|SELAN EXPL. TECH||253.25||185.60||36.5|
|O N G C||201.95||173.70||16.3|