Crude Oil share price target

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Trade deficit widened to USD 15.2 billion in January as against USD 11.2 billion in December on the back of higher oil prices.

25 January 2020 JSW Steels (JSTL) third-quarter result reflects the challenges faced by the industry, with S/A EBITDA/ton at INR5,998 dropping to the lowest level in the past 15 quarters due to a sharp decline in steel prices. Prices have recovered sharply over the past two months, strengthening the margin outlook. We estimate EBITDA/t to improve ~50% QoQ to INR9,000 in 4QFY20. We, however, cut our estimate marginally for FY21 to factor in the delay in the commissioning of the Dolvi plant. Maintain INR26.8b) and PBT declined 81% YoY (-34% QoQ) to INR4.6b due to lower INR4.6b) due to the severe loss in the international subsidiaries. Standalone (S/A) sales volumes were up 10% YoY (+12% QoQ) at 4.0mt, driven by exports (+163% YoY), while domestic volumes declined 8% YoY. Crude steel production also declined 5% YoY (+4.7% QoQ) to 4.02mt. EBITDA/t declined significantly to INR5,998/t (-50% YoY, -7% QoQ) due to lower realization, partly offset by reduced costs.

We expect 26/33% jump in EBITDA for OIL and ONGC on account of 9.6/9% increase in oil/gas realisation in rupee terms. ONGC's oil sales volume is likely to be up 5.7% QoQ to 6.2mmt while gas sales volume should remain flattish QoQ. OIL's oil sales volumes should be up 3.5% QoQ to 0.804mmt and gas sales volumes to 0.637bcm, +2.7% QoQ. Crude prices: Average Brent price has fallen 7.7% YoY and risen 8.9% QoQ to USD 68.8/bbl in 1Q. But, in the last 40-days (-1.5%) and 15-days (-5.5%) of the quarter, the average crude prices and thus product prices have decreased by ~4% resulting in inventory and adventitious losses for OMCs.

Despite threats of production pressure from Venezuela and Iran, global economic slowdown and rising production from the US and OPEC+, oil price outlook appears stable.

15 February 2019 Net operating income increased to INR277b, as against our est. Lower expenditure on account of forex gains resulted in higher EBITDA of INR166b, as against our est. of INR150b (+32% YoY, +5% QoQ). of INR150b (+32% YoY, +5% QoQ). Despite higher-than-expected EBITDA, higher depreciation (including write-offs) dented PAT, which stood at INR82.6b as against our est. of INR80.7b (+65% YoY, flat QoQ). Depreciation including write-offs came in at INR61.5b (+5% YoY, +27% QoQ), due to more-than-double cost (YoY and QoQ) of exploration well write-offs at INR23.9b. Crude oil realization stood at USD66.4/bbl v/s USD60.6/bbl in 3QFY18 and at USD73.1/bbl in 2QFY19.

Crude oil, as we all know, has been soaring higher due to supply constraints in key producing nations. In this video, we provide you with a snapshot of our recently released report on crude oil.

Oil & Gas: Crude oil up YoY, GRMs down YoY, Chemicals: At attractive valuations, Agro-Chemicals: Margin pressure imminent Materials (Oil & Gas, Chemicals): 2QFY19E Results Preview

The recovery off the sub $30 levels has seen WTI oil retracing nearly half of the 2011-2016 bear market decline.

Agrochemicals: FY19 started on a good note, on account of early arrival of monsoons and increase in Minimum Support Price (MSP). We expect our coverage universe to post revenue growth of 8.5% YoY, while the bottom line is likely to be flat YoY. UPL is expected to post a revenue growth of (+9.7% YoY), Rallis (+7.0% YoY) and Dhanuka (+7.0% YoY). Higher raw material prices are a concern for the industry. We expect our coverage universe to post an EBITDA margin of 18.1% (-35bps YoY) for the quarter. Oil & Gas: Crude prices: Brent has jumped 11% QoQ and 48% YoY to USD 74.5/bbl in 1QFY19. We expect inventory gains of ~USD 1.1 to 4/bbls) to downstream companies. Chemicals: Margin pressure imminent: As the Chinese environmental authorities continue to clamp down non-compliant chemical facilities, Indian chemical manufacturers get an unabating support of the prevailing global dynamics. While the China to India play for Chemical companies has sustained till now, commodity prices (Caustic soda, Phthalic Anhydride, TDI, Phenol, Acetone etc) have started to cool off with an improvement in the global supply situation.

Upstream players: The supply cut by OPEC and non-OPEC countries (excluding US), will provide strength to crude prices. However, strong shale oil supplies from US will provide a cap on crude prices. We thus expect oil price to remain range bound. In Q4, ONGC's and OIL's earnings are driven by higher crude oil realisation (we have not factored in subsidy sharing) and dividend income. Downstream: OMCs did not pass on the full impact of rising oil prices in 3QFY18 to auto fuel consumers (likely on account of state elections), compressing marketing margins. But they have hiked prices in 4Q to restore marketing margins. Blended marketing margins were up 6.3-6.5% QoQ to Rs 3/litre. Strong marketing margins and inventory gains are likely to offset for lower refining margins during the quarter.

GRM: Singapore complex GRM was USD 7.3/bbl (-12% QoQ, +9.3% YoY) in 3QFY18. Strong margins in Gasoil and Naphtha have partially negated the weakness in Gasoline and LPG margins. Crude prices: Brent has jumped 22% QoQ and 20% YoY to USD 61.5/bbl in 3QFY18 owing to continuation of supply cuts by OPEC and non-OPEC countries (excluding the US). We expect inventory gains to downstream companies.

Oil prices on Thursday remained near levels last seen in late 2014/2015, with markets tightening amid tensions in Iran and due to ongoing OPEC-led production cuts.

The Indian rupee yesterday slided to one week low to end 7 paise at 64.15 against the U.S. Dollar. Sustained outflow and rise in international crude oil prices along with weak equities...

Oil prices were mixed on Wednesday, even as data from the U.S. Energy Information Administration showed that domestic crude stockpiles declined far more than expected last week.