Oil And Gas Q1 Results Preview - Refiners Hit By Poor GRMs, Marginal Inventory Losses: Yes Securities

Yes Securities Report

Overall, the oil and gas sector's core performance in Q1 FY25 is expected to be weak, oil marketing companies and standalone refiners to witness sequential deterioration in performance driven by declined refining margins along with marginal inventory losses and subdued marketing performance; gas demand picks up but city gas distributions show sluggishness in margins.

Macros: The price of Brent crude for the quarter averaged $85/barrel of oil up $3.2 QoQ and $7.7 YoY. The benchmark Singapore GRM at $3.4/bbl, was $3.9/bbl lower than the previous quarter with a fall in key product cracks – gasoline/gasoil/ATF/ down by USD/bbl of 4.8/8.1/8.1/4.7.

The gross marketing margins for OMCs have marginally fallen sequentially on rising crude prices and a price cut pre-elections. The spot LNG prices averaged $11.1/mmbtu versus 9.4 in the previous quarter.

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