Falling Margins May Hurt Refiners; Explorers To Gain From Higher Crude Prices

Falling Margins May Hurt Refiners; Explorers To Gain From Higher Crude Prices

Falling margins may hurt oil refiners while a rise in crude prices is expected to help oil and gas explorers post better earnings in the January-March quarter of the financial year 2016-17.

The Singapore gross refining margins (GRMs), the Asian benchmark of profitability for refining companies, fell in the quarter-ended March over the previous three months. This will result in lower margins and inventory losses for downstream and oil marketing companies like Reliance Industries Ltd., (RIL) Indian Oil Corporation Ltd., (IOC) and Bharat Petroleum Corporation Ltd. (BPCL).

Brent crude, which is a major benchmark for purchases of oil worldwide, averaged $54.6 a barrel during the quarter, 7 percent higher over October-December period. Higher crude prices could improve realisations of upstream companies or explorers like Oil and Natural Gas Ltd. (ONGC) and Oil India Ltd. Absence of any subsidy burden will improve performance.Read More..

 

Credit By: Bloombergquint

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