As the Brent crude oil price continues its uptrend and is now trading close to its 2019 highs, the share price of India’s largest crude oil producer, Oil and Natural Gas Corporation (ONGC), too, has gained more than 20 per cent from its February lows.
While rising crude prices will benefit the upstream oil producer, which also owns oil and gas fields in the overseas markets through its subsidiary ONGC Videsh, ONGC will also benefit from an increase in domestic gas prices as well as production, being the largest gas producer in the country.
With the pricing and volume outlook improving, analysts expect its gas segment to aid earnings growth significantly during FY19-21. Not surprising, ONGC remains the pick (within oil and gas space) of many brokerages, including Jefferies and CLSA. Read More