Why are crude prices rising and what will be the impact on OMCs? Probal Sen answers
Probal Sen, V-P, Equity Reearch, ICICI Securities, says “higher demand from gas fired power would definitely drive prospects for Petronet, GAIL, as well as GSPL. As far as the CGDs is concerned, there was a little bit of a correction post the first quarter results across the board. Specifically, if I look at IGL and MGL, post the first quarter results. I think that confidence is coming back. That is why LNG prices continue to be in a fairly limited range, European inventory remains very comfortable so there is very little chance of additional buying coming through from that continent for LNG cargoes.”
China is not coming back the way everybody expected. Europe is still in a disarray. The US economic growth is uneven and crude prices are up. Historically, crude is a function of demand or supply. Both are balancing each other yet crude prices have gone from $75 to $90. Why?
I would not quite say that demand and supply are that balanced.
