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CPCL and MRPL Shares Rise as Refinery Margins Support Gains
CPCL and MRPL are companies that refine crude oil into useful products.
Their shares rose by as much as 13%.
An analyst said higher oil prices and good refining margins may help these companies.
Refining margin means the value of the products made minus the cost of the crude oil used.
Oil prices went up as traders considered possible disruptions to oil and gas production from a storm near the Gulf of Mexico.
The offshore areas in the storm’s expected path produce about 15% of US crude oil and 5% of its natural gas.
Attacks by Yemen’s Iran-backed Houthis on Saudi Arabia also added to supply concerns.
At the same time, markets considered increased crude supplies from West Asia.
The article also noted that US-Iran relations remained strained.
Shares of CPCL and MRPL rose by as much as 13%, with analysts pointing to higher crude prices and healthy refining margins as potential support.
Choice Institutional Equities said last month that higher crude prices were a headwind for oil marketing companies but could benefit CPCL and MRPL.
The brokerage set target prices of Rs 215 for MRPL and Rs 1,540 for CPCL.
Brent futures rose 0.84% to $101.42 a barrel, while US West Texas Intermediate crude rose 0.73% to $90.09.
Markets weighed possible supply disruptions from a Gulf of Mexico storm and Houthi attacks on Saudi Arabia against increased West Asian crude supplies.
- Who
- Chennai Petroleum Corporation Limited (CPCL), Mangalore Refinery and Petrochemicals Limited (MRPL), and analysts discussing the companies.
- What
- CPCL and MRPL shares rose by as much as 13%, with higher crude prices and healthy refining margins cited as possible support.
- Where
- The companies are Indian refiners; the reported oil-market developments involved the Gulf of Mexico, Saudi Arabia, and West Asia.
- When
- The article refers to prices checked at the time of reporting and to events on Tuesday; it does not give a publication date.
- Why
- Analysts said higher crude prices and healthy gross refining margins could support the refiners, while markets weighed potential supply constraints against increased supplies.
Key facts
- Maximum reported share rise
- Up to 13% for CPCL and MRPL
- Brent crude
- $101.42 a barrel, up 0.84% at the time checked
- WTI crude
- $90.09 a barrel, up 0.73% at the time checked
- MRPL target price
- Rs 215 per share, suggested by Choice Institutional Equities
- CPCL target price
- Rs 1,540 per share, suggested by Choice Institutional Equities
- Offshore production in storm path
- Around 15% of US crude oil production and 5% of US natural gas output
Sources
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