OMCs slip in trade as oil hits 3-month high amid escalating Middle East tensions

crude-oil

Stocks of oil & gas companies are trading lower on January 3 even as global oil prices hit 3-month high following US air strike that killed key Iranian and Iraqi military personnel, raising concerns regarding escalating Middle East tensions may disrupt oil supplies.

Brent crude futures jumped nearly $3 to hit a high of $69.16 a barrel, highest since September 17. The front-month Brent March contract was at $68.25 a barrel, up $2, or 3 percent, by 0258 GMT.

Nifty Energy is trading flat in with oil marketing companies under pressure following spike in crude oil prices. HPCL is down over 2 percent while BPCL and Reliance Industries shed half a percent each. Chennia Petroleum Corporation shed a percent

Oil prices were also lifted by China’s central bank saying on Wednesday it was cutting the amount of cash that banks must hold in reserve, releasing around 800 billion yuan (USD 115 billion) in funds to shore up the slowing Chinese economy.

Global research firm Goldman Sachs has coem out with its report on the oil & gas space and has upgraded ONGC and Oil India Limited to buy from neutral. It is of the view that positive catalysts are likely to reverse underperformance adding that FCF generation and dividend yield remains robust.

Key catalysts are improvement in upstream equity sentiment in H2 and volume trends.

Technical Analyst Ashwani Gujral of ashwanigujral.com has a buy on Reliance Industries with a stop loss of Rs 1520, target of Rs 1565.

Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

News Source:- MoneyControl

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