Crude oil prices have been subdued in the last few trading sessions on demand concerns as the macroeconomic data of key consumer countries, such as the US and China show signs of stress.
Besides, the anticipation of higher US crude production and the progress on Iran’s nuclear talks also weighed on oil prices.
As Mint reported, analysts believe that Brent prices may remain volatile but will likely stay below $100 a barrel due to muted demand and expectations of more supplies.
Softer crude prices are favourable for the Indian economy and, in turn, markets. However, it may not be good news for upstream oil producers such as ONGC and Oil India.
As reported by Mint, in the June quarter, ONGC reported an Ebitda of ₹25,930 crore (up 113% year-on-year and 39% sequentially) at a standalone level, primarily due to higher crude and gas prices and helped by oil realization at $108.5 a barrel, up 65% from the year-ago and 14% sequentially.
The Mint report further added that ONGC’s gas price on the basis of gross calorific value came in at $6.10, up 240% from the year-ago following domestic gas price revisions in line with international gas prices.
Despite the strong performance, analysts have downgraded earnings. “We trim FY23 and 24 EPS estimates by 28% and 11%, respectively, on lower crude oil realization at $74 and $75 a barrel from earlier estimates of $95 and $90 per barrel given $30 a barrel windfall tax," Mint quoted Elara Securities (India) saying so.
Disclaimer: This article is based on a report published in Livemint.
