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At current crude levels, correction could turn ONGC attractive
Business Standard
|March 05, 2025
Oil stocks have dropped around the world after OPEC Plus said it was raising production.
Demand for crude and gas is being negatively impacted by fears that the Trump tariff policy will reduce growth. Hence, traders are seeing a situation where supply could increase when demand is reducing.
The US EIA forecasts Brent crude prices to average $74 per barrel in calendar year 2025 (CY25), down 8 per cent year-on-year (Y-o-Y) and to decline to $66 per barrel in CY26. Global oil production will rise faster than oil demand through this period. Global inventories will increase by an average of 0.9 million barrels per day in H2CY25 and by 1 million barrels a day CY26.
While this may be a relief for downstream players, it puts pressure on ONGC and Oil India and Reliance Industries. ONGC's third-quarter financial year 2025 (Q3FY25) standalone operating profit at ₹19,000 crore was higher than consensus due to better net crude realisation at $73 per barrel and slightly higher gas sales volume and realisation, though this was partly offset by higher opex at ₹6,670 crore.
This story is from the March 05, 2025 edition of Business Standard.
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