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Moneycontrol Pro Panorama | Global oil buyers get their act together

In today’s edition of Moneycontrol Pro Panorama: Lustre is off Paytm, Burger King’s growing appetite, HUL has its task cut out, the Recovery Tracker, the Bosch interview and more

November 23, 2021 / 05:35 PM IST

Dear Reader,

The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.

Sometimes, pressure tactics are called for. Take crude oil, for example. Brent crude oil futures eased below $80 per barrel after the US reached out to India and other large consumers to release their strategic fuel reserves to tame prices. Responding to the request, Japan and India are looking at ways to release crude oil reserves in tandem with the US and other major countries, reported Reuters.

Note that the fall in crude oil prices coincided with renewed COVID-19 curbs in Europe and there is no official word on the release of reserves by the Indian government. Even then, the developments seem to have attracted the oil cartel Organization of the Petroleum Exporting Countries’ (OPEC) attention which could initiate countervailing measures.

Still, the rapid rise in crude oil prices this year is triggering supply side action. Global oil production increased by 1.4 million barrels per day (mb/d) in October, partly helped by the post-hurricane recovery in the US, the International Energy Agency (IEA) said in its latest report.

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Supplies are projected to rise by another 1.5 mb/d over November and December even if OPEC+ disregards pleas of production ramp-up. This can keep prices in check.

“New Northern Hemisphere COVID-19 outbreaks, slightly weaker industrial activity and higher oil prices will temper gains, leaving our forecast for oil demand growth largely unchanged from last month’s report,” IEA said in an update. Stabilisation or reduction in oil prices can bring some reprieve for consumers and policymakers who are struggling to cope with pricier oil's impact on inflation. More clarity is required on the supply side actions being taken by key stakeholders.

Meanwhile, Bharti Airtel surprised investors by taking the lead in raising pre-paid mobile tariffs. Cash-strapped Vodafone Idea followed Airtel and announced a tariff hike. The tariff hikes, if implemented by all, can improve the sector’s price realisations while aiding Airtel’s average revenue per user. Read our analysis here.

In other developments, we analysed the impact of the Unilever’s decision to sell its tea business outside India, Nepal and Indonesia on its local subsidiary Hindustan Unilever (HUL). The exit by the parent provides both an opportunity and a challenge to HUL, writes Ravi Ananthanarayanan. The tea market in India is growing and HUL can chart its own course. However, the benefits of the shared functions may no longer exist for HUL. Do read.

Investing insights from our research team:

Why the steep fall in stock price does not make Paytm attractive

Burger King India: Strong recovery quarter; multiple growth levers

What else are we reading today?

Economic Recovery Tracker | Indicator map is a sea of green

Digital push could upend the pharmaceutical supply chain

GST rejig — Aim for a single rate in the long run

Crypto Conversations: Understanding NFTs and your guide to investing in them

Interview | Semiconductor crisis likely to spill over into 2022: Soumitra Bhattacharya, Bosch MD

The ‘Tesla-financial complex’: How carmaker gained influence over the markets (republished from the FT)

Picks from our technical analysts: VedantaTata SteelMuthoot Finance and Havells (These are published every trading day before markets open)

R Sree Ram

Moneycontrol Pro

 
R. Sree Ram
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