Jefferies Turns Bullish on Oil Marketing Stocks Despite Margin Worries
Jefferies, a financial services firm, has reversed its earlier caution and now supports the ongoing rally in oil marketing companies (OMCs) in India. This sudden shift in outlook stems from several key factors: Stable Oil Prices: Despite geopolitical tensions and disruptions in the Red Sea, crude oil prices have remained surprisingly stable, hovering between $75 and $85 per barrel since November. This stability alleviates concerns about significant price hikes impacting refining margins. Government Restraint: Jefferies' initial apprehension stemmed from fears of government intervention in fuel prices ahead of upcoming elections. However, they now express confidence that the government will refrain from such measures, allowing OMCs to operate in a more predictable environment. Normalization of Margins: While diesel marketing currently faces temporary losses, Jefferies expects these to be corrected through potential post-election price adjustments. Furthermore, they project a