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India Ratings & Research today said it maintains a stable outlook for the nation's oil and gas sector for the 2014-15 fiscal.
"The rating outlook for both public and private sector oil and gas companies remains Stable," it said in a statement.
The agency expects public sector companies to sustain strong linkages with the government or maintain business stability in case of standalone ratings.
"The existing ratings of private sector companies have sufficient headroom to withstand the impact of muted global growth and further moderation in gross refining margins (GRM)," it said.
India Ratings estimated Brent crude oil prices to hover in the range of $104-108 per barrel in 2014-15 as energy sufficiency of US has moderating influence on global oil rates.
"Geopolitical positives such as options of increased supply from Iran and Libya may add to the bearishness of crude prices," it said.
Organisation of Petroleum Exporting Countries or OPEC, responsible for around 40% of global crude production and around 60% of global traded crude, may lower its output as it has done in the past, in the face of moderation in crude oil prices.
"While global crude prices may slip below $100/bbl in some instances, they are unlikely to remain at such levels for a sustained period in FY15," the statement said.
The price of Indian crude basket may reduce by $2 to $4 per barrel in FY'15. This, along with muted incremental demand for crude oil in FY'15, is unlikely to deteriorate revenue losses or under recoveries on diesel and cooking fuel sales, in US dollar terms during the year from FY'14 levels.
However, if rupee depreciates significantly against the US dollar, such benefit may be wiped out.
"Furthermore, given the fiscal deficit target, the time lag with respect to the actual transfer of subsidy to oil marketing companies is likely to persist in FY'15," it said.
Indian refiners are unlikely to have GRMs in excess of $8 per barrel, as was seen for the major part of FY'13, while at least a quarterly GRM falling below $7 is not a remote possibility, India-Ratings added.
