ICICI Securities: Smart Oil Price Recovery, But Headwinds To Further Rise For Upstream Players

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..ICICI Securities Report.Sharp recovery in oil price from lows in April 2020 was driven by fall in global supply surplus from 22.7 million barrel per day in April 2020 to demand-supply balance in June 2020.However, the headwinds to further rise are: 1) Agreed MoM increase in OPEC plus output in July-August 2020; 2) likely recovery in U.S. and Canada output from the lows in June 2020; 3) possible recovery in Libya’s oil production; 4) second wave of Covid-19 infections leading to lockdowns and stalling/reversing demand recovery in the U.S. and India and 5) persistent weakness in gross refining margin, which may lead to cut in refinery throughputs and therefore, demand for oil.Thus, oil appears to be out of the woods, which is positive for Oil and Natural Gas Corporation (ONGC), but significant further rise appears unlikely in the near term. While International Energy Agency (IEA) estimates supply deficit in Q3-Q4 CY20, Rystad Energy estimates supply surplus even in most of H2 CY20..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

ICICI Securities: Smart Oil Price Recovery, But Headwinds To Further Rise For Upstream Players

ICICI Securities: Smart Oil Price Recovery, But Headwinds To Further Rise For Upstream Players

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