Oil & Gas Sector Update: Covid-19 Resurgence In Europe To Weigh On Margins: ICICI Securities
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ICICI Securities Report
Lockdowns in Europe due to surge in Covid-19 has hit oil demand.
Demand was down 14-24% YoY in six European economies (Europe-6) in December 2020-January 2021 and 21% YoY in three economies (Europe-3) in February 2021; fall is steeper in petrol than in diesel.
European demand worries together with rise in U.S. oil inventories by 41 million barrel of oil in past five weeks, as snowstorms hit refinery utilisation, has led to $7.6/bbl of oil fall in brent and $0.6-3.3/bbl fall in petrol and diesel cracks from recent peaks.
However, falling prices may boost net marketing margin from minus Rs 0.22/litre now to Rs 1.2-1.7/litre on April 1 to 16, 2021.
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