The price of crude oil comes at $ 70 per barrel. Amk likes these stocks

Brent prices have dropped to $ 70 per barrel as OPEC+ moves to unindin slowly its voluntary production, but Amk Global Financial Services believes that this level is suitable for India’s oil marketing companies (OMCs), such as oil and natural gas.

While low crude prices generally benefit from India’s economy, Amk Global noted that the steady decline makes both winners and lost in the domestic oil and gas sector.

OPEC+ decision to return 2.2 million barrels (MBPD) oil per day in the market over the next two years was “cautiously” but still noticeable, though it accounts for 38% of the 9.9 MBPD of the accumulated cut after 2022. “Brent prices are below USD 70/BBL and there is a possibility of near-term damage,” Amke noted, adjusting its crude price assumption to PER 75-80 per barrel-70-75.

Oil prices continued to decline on Wednesday, Brent crude futures fell 0.3%. 70.80 barrels and US West Texas Intermediate (WTI) crude slid 0.9% to 67.68.

Shares of key Indian oil and gas companies were rally on Wednesday. Oil and Natural Gas Corporation (ONGC) increased by 1.9% to Rs 231.25, while Oil India increased 7.5% to Rs. Has reached 376.65. Gail (India) shares increased 3.9% to Rs. Is 3.29..1.

OMC back in ‘Sweet Spot’

Amkee said $ 70 per barrel, despite some SET Fasting Factors to OMC, the high marketing margin on auto fuel could benefit. “USD 70/BBL oil brings back to RS 8/12 per liter on a sweet spot with CP diesel/petrol gross marketing margin, which is higher than the ~ RS250/CY of LPG’s under-recourse.” The broker added that Season can further reduce LPG damage, which increases profitability for state -run refiners.

While there is a concern over a potential price reduction or excise duty by the government, Amk believes that there is a possibility of some government support. “Some LPG subsidy (we have assumed that RS 200 billion)

Limited loss to ONGC, oil India despite a decline in earnings

For upstream manufacturers ONGC and Oil India, Imce expects that if crude remains in the range of -70-75, reducing earnings by 6-9%. However, Brokerj said these stocks had already improved in anticipation of a weak feeling. “Our upstream earnings, which are on the USD 75/BBL net oil experience, decrease 6-9% with NWG realization, but the resulting TP ~ RS270/510 for ONGC/Oil India, which provides 20%/40% upside from CMP.”

Promoting production data can also be supported. ONGC -operated oil output increased by 1.5% annually in January, leading kg 98/2 wealth, while oil India gas production increased 7%. Crude output growth, however, was about 1% muted in the year-by-year.

Gail faces pressure, but valuation attractive

Gayle’s petrochemical and gas marketing segments may face pressure from low oil prices, as the petrochemical business is linked to realized oils. In addition, Gail’s U.S. The spread of LNG sales may be compressed, as the price of Henry Hub remains stable at 4 4.4 per million British thermal units (MMBTUs.

However, Amke maintained a positive stance on the stock by quoting the next regulatory decision as a major trigger. “Gail evaluation seems reasonable and the next pipeline tariff increase is the key trigger.”

A view of the field of amka

Weak crude prices worry about the atmosphere upstream feeling .The brokerage remains creative on OMC, upstream manufacturers and Gail, ranking its choice in order. Brokerage believes that the evaluation remains attractive despite the near -term instability in crude prices.

Also read | The Sensex jumps 900 points, the Nifty snap 10-day defeat. Is it just a dead cat bounce rally?

(Connection: The recommendations, suggestions, opinions and opinions provided by experts have their own. This does not represent opinions of economic time)