OMCs in good spot, see crude at USD 70/bbl: HDFC Sec

Saudi Arabia’s unexpected move to cut price of oil sold to the US even before OPEC’s next bidding shows that WTI crude price will fall further. Speaking to CNBC-TV18, Vinod Sharma of HDFC Securities says he sees crude at USD 70 a barrel soon and hence favours oil marketing compnies, particularly HPCL. Crude oil prices have hit a four-year low of USD 82 a barrel.

Indian Oil Corporation has doubled the petrol pumps as compared to Bharat Petroleum Corporation and Hindustan Petroleum Corporation put together. However, my sense is, technically HPCL looks much better at this point of time."

For the short-term, I am looking at buying the 540 Call of HPCL at around Rs 17, stoploss at Rs 12 and hoping to sell it at around Rs 30.

Reuters Adds

US crude futures edged up to over USD77.35 a barrel on Wednesday in early Asian trades in the wake of news that US crude stocks unexpectedly fell last week as refineries boosted output, but global supply glut woes capped the prices at multi-year lows.

FUNDAMENTALS

* US crude futures gained 18 cents at USD77.37 a barrel as of 0000 GMT. On the previous session, it settled down USD1.59 at USD77.19 after reaching the lowest intraday price since October 2011 in the morning.

* Brent for next-month delivery settled down USD1.96 at USD82.82 after touching its lowest point since October 2010.

* Data from industry group the American Petroleum Institute showed on Tuesday, crude inventories fell by 639,000 barrels to 374.9 million in the week to Oct. 31, compared with analysts' expectations for a increase of 2.2 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 804,000 barrels.

Gasoline stocks rose by 240,000 barrels, compared with analysts' expectations in a Reuters poll for a 400,000-barrel decline.

* The Organization of the Petroleum Exporting Countries (OPEC) meets Nov. 27, but there are no clear signs whether it will curb output.

Saudi Oil Minister Ali al-Naimi and Venezuelan Foreign Minister Rafael Ramirez will meet on Wednesday on the sidelines of a climate conference, according to a person close to the Saudi delegation.