- 17 Nov 2023
- ICICI Securities
FALL IN CRUDE OIL PRICES TO BENEFIT OMCS, NEGATIVE FOR GUJARAT GAS
News: Brent crude oil prices has seen a sharp correction to US$77 per barrel from earlier US$ 82 levels in recent times, on higher US crude oil inventory levels amid steady US production and lower China crude refining volume (down 3% in October).
Views: While OMCs would benefit the most out of the fall, the stock price reaction would be limited due to uncertainty related to upcoming general elections. Gas sectors (esp Industrial PNG heavy players like Gujarat gas) would be negatively impacted due to concerns related to similar fall in petroleum products such as LPG. Upstream players would largely remain neutral as their realisation in capped (with a limited cash flow impact in near term). Standalone refining players and petchem players as MRPL, CPCL, RIL could see neutral to negative reaction based on impact on overall GRMs (could correct as well).
Impact: Neutral