US Shale oil production is booming and slated to grow at 10% a year till 2019. Mexico has approved foreign investment in its oil companies.
Iran has an interim deal with US which would herald its return to oil markets. China’s growth is only 4% in terms of oil requirements. US demand for crude has been sliding. All of these point to lower oil prices this year.
Natural gas is a by product of fracking and its supply also exceeds demand, keeping low prices low in North America. This year some companies will begin exporting it to Asia- India, Japan, mainly. The price in North America is $3 and here its almost $12. The new supply should put downward pressure on prices here as well.
Together, this indicates lower energy prices and higher margins for refiners. This would make oil refiners, retailers, a good buy. Oil exploration and equipment would have downward pressure. Transport and logistics would benefit, as well as airlines and tourism. On a macro side, this would mean lower import bill for the country, which is good for the Rupee.
What would be good stocks to trade on this? I am new to the Indian equity market as I’ve mostly traded equities and FX only in US. Recommendations for stocks to follow for the longer term in India would be welcome!
Iran has an interim deal with US which would herald its return to oil markets. China’s growth is only 4% in terms of oil requirements. US demand for crude has been sliding. All of these point to lower oil prices this year.
Natural gas is a by product of fracking and its supply also exceeds demand, keeping low prices low in North America. This year some companies will begin exporting it to Asia- India, Japan, mainly. The price in North America is $3 and here its almost $12. The new supply should put downward pressure on prices here as well.
Together, this indicates lower energy prices and higher margins for refiners. This would make oil refiners, retailers, a good buy. Oil exploration and equipment would have downward pressure. Transport and logistics would benefit, as well as airlines and tourism. On a macro side, this would mean lower import bill for the country, which is good for the Rupee.
What would be good stocks to trade on this? I am new to the Indian equity market as I’ve mostly traded equities and FX only in US. Recommendations for stocks to follow for the longer term in India would be welcome!