Elevated crude prices near $110 per barrel are prompting analysts to direct investors toward exploration and production players instead of oil marketing firms. Upstream companies are taking advantage of a widening spread between crude oil and diesel to generate stronger export revenues. Avinash Gorakshkar notes that the international diesel-to-crude price gap expanded from $36 to $85 per barrel after the conflict began. Consequently, ONGC and Reliance Industries are highlighted as preferred choices to manage these shifting energy market conditions.
Key points
Investors are urged to transition from downstream oil marketing firms to upstream explora…: Investors are urged to transition from downstream oil marketing firms to upstream exploration and production companies.
ONGC provides an attractive portfolio option because it is insulated from high crude inpu…: ONGC provides an attractive portfolio option because it is insulated from high crude input costs through strong export earnings.
Market analysts recommend holding ONGC equity with a strict stop-loss maintained at the ₹…: Market analysts recommend holding ONGC equity with a strict stop-loss maintained at the ₹220 support level.
Sources checked by our analysis pipeline: 1
HPCL vs BPCL, IOCL vs ONGC: Amid crude oil prices sustaining at elevated levels and $110/bbl becoming the new normal for the most-traded commodity on the MCX, stock investors are advised to devise their strategy and zero in on oil stocks that will be less affected by the change in the normal crude oil price due to the prolonged US-Iran war and closure of the Strait of Hormuz.
According to stock market investors, stock investors need to shift focus from oil marketing companies to oil exploration companies, because Oil Exploration and Production (E&P) companies are getting the benefit of the rise in the crude oil and diesel oil price gap in the international market due to the disruption in crude oil supply post-US-Iran war.
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