Brokerage downgrades OMC stocks as Brent above $90/bbl plays spoilsport; maintains ‘buy’ on BPCL, HPCL
Oil marketing companies (OMCs) including Bharat Petroleum Corporation Ltd (BPLC) and Hindustan Petroleum Corp Ltd (HPCL) saw a downgrade in their current target prices, a day after international crude oil prices sharply rose above $90 per barrel. Domestic brokerage firm maintain near-term cautious view on all OMCs given their marketing segment earnings comes under risk if Brent crude price sustains above $85 per barrel.
Saudi Arabia and Russia on Tuesday extended their voluntary oil cuts to the end of the year, the former to the tune of 1 million barrels per day (bpd) and the latter by 300,000 bpd.
These are on top of the April cut agreed by the Organisation of Petroleum Exporting Countries and its allies (OPEC+) running to the end of 2024. Investors had expected Saudi Arabia and Russia to extend voluntary cuts into October, but the three-month extension was unexpected.
Brent crude futures rose by $1.04, or 1.2 per cent, to settle at $90.04 a barrel in yesterday’s session, closing above the $90 mark for the first time since November 16, 2022. US WTI futures had gained $1.14, or 1.3 per cent, to settle at $86.69 a barrel, also a 10-month high.
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Updated: 06 Sep 2023, 09:42 PM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.