“Yes, if you really look at the way oil prices have behaved and the way that OPEC has reacted, very clearly they are being pragmatic about how many additional barrels they can actually put into the system without impacting oil prices even more,” Sen said in an interview to ET Now.
He pointed out that demand estimates remain uncertain, with US inventory data showing larger-than-expected builds in recent weeks. This has led to weaker demand growth projections in the short term, though the outlook could shift depending on new data.
On the trajectory of oil prices, Sen believes stability is likely. “Historically what we have seen is when oil moves in a narrow range, that is always something that is good for Indian oil and gas companies,” he said. While upstream producers face limitations due to government intervention during sharp price spikes, refiners and marketers benefit from consistency. Sen expects prices to hover between $65 and $75 a barrel in the near to medium term, supported by OPEC’s balancing act and natural demand reactions at lower price points.
Turning to the outlook for India’s state-owned oil marketing companies (OMCs), Sen was constructive. “They are very clearly focused on interacting and communicating with investors both on the sell and buy side to understand where the concerns are and how to best address them. I think that intent should be taken extremely positively,” he noted.
With crude trading in a manageable range, retail margins above historical averages, and refining margins settling at $3.5–$4 a barrel, Sen expects the three OMCs to deliver solid earnings. He added that balance sheets are stronger, LPG losses are a fraction of last year’s levels, and working capital concerns have eased.“At this point of time, valuations of between four to six times FY28 EV/EBITDA at 0.9 to 1.1 times price to book are fairly comfortable levels to sort of add positions in these stocks,” Sen said.
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