2023-12-01 05:23:00
Oil prices rose this week ahead of a crucial OPEC meeting, with expectations of deeper and longer oil production cuts driving the increase. The global benchmark, Brent crude, was down 1.1 percent at $79.67 a barrel by 12:17 GMT, while US West Texas Intermediate (WTI) crude futures lost 1.2 percent to settle at $74.65. Oil prices have fallen nearly 16 percent after hitting $100 a barrel in September.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, held an online ministerial meeting on November 30 to discuss production targets for 2024.
Meanwhile, HSBC has raised its target prices for several oil companies, citing an expected upside of up to 30 percent. The brokerage firm forecasts improved performance for oil marketing companies and sees potential for increased refining margins and free pricing with continued government assistance.
HSBC raised its target price for Indian Oil Corporation Ltd (IOCL) to Rs 130 per share from Rs 80, reflecting a 20 percent increase from the previous 52-week high. The company’s gross refining margins increased by 118 percent in the previous quarter, with net profit standing at Rs 12,967 crore in Q2FY23. The stock has gained 23 percent in the past month.
For Bharat Petroleum Corporation Limited (BPCL), HSBC raised its price target to 555 rupees from 340 rupees a share, reflecting a 30 percent increase from the 52-week high. The company’s gross refining margins increased by 46 percent in the quarter, with net profit standing at Rs 8,501 crore in Q2FY23. The stock has gained 16.8 percent in the past month.
Lastly, HSBC revised its price target for Hindustan Petroleum Corporation Limited (HPCL) to Rs 375 from Rs 215 a share, reflecting a 7.5 percent increase from the 52-week high. The company’s gross refining margins increased by 79 percent in the quarter, with net profit standing at Rs 5,118 crore in Q2FY23. The stock has gained 38 percent in the past month.
These positive developments come as the oil industry faces shifting dynamics, with rising oil prices and expectations of production cuts driving optimism for oil companies.
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