Nomura maintains its bearish medium-to-long-term outlook on crude oil, citing the potential for the largest-ever global oil surplus in 2027E based on IEA forecasts.
At last check, Brent crude was up 4.09 per cent at $79.12 a barrel, while US West Texas Intermediate (WTI) crude rose 4.10 per cent to $74.33 a barrel.
A reopening of the Strait of Hormuz would provide significant relief for India by easing concerns over oil supplies, lowering freight costs and reducing pressure on inflation.
Sensex Today | Stock Market Highlights, Tuesday: In the broader markets, the Nifty MidCap and the Nifty SmallCap ended 0.91 and 1.17 per cent higher, respectively
Public sector OMCs, including Indian Oil, BPCL, and HPCL, have been incurring losses of about ₹20 per litre on petrol and nearly ₹100 per litre on diesel due to elevated global crude prices
Market analysts attributed the sharp spike in crude oil prices to supply disruptions amid concerns that output from key West Asia producing regions may remain constrained for longer
Rising crude costs, reduced access to discounted Russian oil and heavy capex may pressure OMCs, though strong GRMs, demand growth and LPG subsidies support profits
HPCL has retreated sharply from its all-time high, and also underperformed its peers BPCL and IOC in the month of January thus far. Tech chart shows the stock is trading at the 200-DMA on Friday.
Despite the near-term volatility, HPCL's valuations remain reasonable, the brokerage noted. The stock trades at 1.4x one-year forward price-to-book, slightly above its long-term average of 1.2x.
Analysts believe that OMCs now have a large margin of safety owing to low oil price and a large capex plan which gives them confidence that a normative level of earnings will still be maintained.
BPCL, HPCL, IOC, Asian Paints, and other downstream oil companies' stock surged, while ONGC, Oil India dropped after Brent crude oil slipped 5 per cent
The Indian government has increased the price of a 14.2 kg LPG cylinder by ₹50. Simultaneously, the government has raised the excise duty on petrol and diesel by ₹2 per litre, a move impacting OMCs.
