Crude Oil To Sustain Below $60 A Barrel? Stocks & Sectors To Watch

Crude lipid prices person collapsed successful nan past fewer days pinch crude hardly moving supra $60 a tube connected Tuesday. Crude lipid prices had settled astatine their lowest since February 2021 connected Monday. This tends to beryllium supportive for awesome lipid importing countries for illustration India, which not only use from little dollar outflow, but besides prime oil-dependent sectors getting immoderate assistance from falling crude prices.

Crude lipid prices person travel nether unit owed to 2 superior factors, said Abhishek Jain, Head of Research astatine Arihant Capital Markets. First, location are increasing concerns astir a slowdown successful world business activity, peculiarly pursuing nan escalation of tariff-related tensions. Second, OPEC’s caller determination to summation accumulation by 4 lakh barrels successful June," he said.

Echoing nan akin notion, Prashanth Tapse, Senior VP (Research), Mehta Equities said that anemic world request on pinch slowing down of awesome economies for illustration US and China is putting unit connected crude lipid prices.

Crude prices cannot prolong astatine these levels for agelong word arsenic lipid countries for illustration Saudi Arabia and Russia will return measures to curb nan supply. Besides that, geopolitical factors will besides subside, which will push nan crude lipid value towards $75-80 per barrel, he said.

However, Jain from Arihant Capital has different view. "The $55–$60 scope appears to beryllium a beardown support area for crude lipid successful nan adjacent term. While prices whitethorn stay astir this level successful nan absence of a full-blown recession, immoderate further signs of world economical weakness could exert further pressure. Crude is expected to hover adjacent existent levels successful nan mean term," he said.

Falling crude lipid prices typically use sectors that are dense consumers of petroleum-based inputs. Oil trading companies (OMCs) could spot separator improvements owed to little input costs, said Jain. "Overall, industries straight aliases indirectly tied to crude—like paints, aviation, and chemicals—stand to summation if nan inclination sustains," he said.

Swarnendu Bhushan, Co-Head of Institutional Equities astatine PL Capital believes Brent will bounce backmost to $70 per tube soon arsenic sanctions against Venezuela and Iran tighten. "Additionally, nan marginal costs of accumulation is besides $70/bbl. Continued proviso hike from OPEC+ remains a consequence though," he said.

According to Tapse from Mehta Equities sectors including paints, aviation, logistics and proviso concatenation antagonistic will beryllium awesome beneficiaries of falling crude lipid prices. He besides mentioned that if nan benefits of falling crude lipid are passed connected to consumers, it whitethorn use FMCG and user discretionary sectors arsenic well.

OPEC+ proviso to summation led by 8 countries pinch Saudi Arabia starring nan maturation while immoderate trim their accumulation to oblige nan quotas, said YES Securities. "Additionally, geopolitical concerns including Red Sea transit risks, Iranian sanctions still underpin immoderate consequence premium successful prices," it said.

A autumn successful world lipid prices straight could person a affirmative effect connected refining margins and amended nan trading conception profitability, peculiarly for companies for illustration HPCL, BPCL, and IOCL but erode nan net for nan upstream players – ONGC and Oil India, YES Securities added.