Coronavirus outbreak: Subdued crude oil prices to help HPCL, other OMCs

IOC and BPCL to also gain from lower working capital requirement and firm marketing margins, but weak GRMs may limit the upside

Crude oil prices are on a slippery slope as global demand is likely to be impacted by the outbreak of the novel coronavirus in China. Against this backdrop, the International Energy Agency has lowered its oil demand forecast. The Organization of the Petroleum Exporting Countries (Opec) had cut its outlook for 2020 global oil demand growth by 0.99 million barrels per day a few days ago.

Even as demand growth expectations have been lowered — given the fear of losing market share to the US — the Opec may not consider a production cut, keeping oil prices subdued. Such a