InvestorQ : What happens to Indian oil companies like ONGC, OIL and RIL after oil supply cuts kick in from May? Will these stocks benefit from higher oil prices?
Debbie Mascarenhas made post

What happens to Indian oil companies like ONGC, OIL and RIL after oil supply cuts kick in from May? Will these stocks benefit from higher oil prices?

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Crowny Pinto answered.
1 year ago
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There could be some good news for oil companies in May on the supply front as the supply cuts kick in. However, weak demand remains a major issue. In the June quarter, the overall OPEC oil output is expected to drop by over 12% as oil companies cut down drastically on output in the light of weak demand. If you add up the output cuts by Russia, the Baltic’s, OPEC and the US Shale, the total output cut could be as high as 23%. This should hopefully be able to match the contraction in demand and prevent price destruction in a big way. Demand for oil has fallen sharply across some of the biggest oil consumers like China, Japan, EU and India. Brent had dipped below $20/bbl but had bounced back on the back of deep supply cut hopes to above $28/bbl. For oil companies, this may just be a temporary relief as revival in demand and expansion of gross refining margins will be more critical.

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