Oil & Marketing Companies (OMC) climbing to 1 percent in early trade in Pakistan Stock Exchange – PSX on Thursday after further spike in crude oil prices in International market. Oil surges to $67.33, hitting 3-year higher yesterday.
One of the immediate factors helping
to lift the oil prices are heaping concerns of a military escalation in Syria,
but prices were some way off Wednesday's 2014 highs as bulging American
supplies weighed.
Both Brent and WTI crude hit 2014
highs, after Saudi Arabia said it intercepted missiles over Riyadh and US
President Donald Trump warned Russia of imminent military action in Syria.
Then Chinese President Xi Jinping
showed signs of relenting in the trade spat with the United States, promising
to open up China’s economy, including lowering tariffs on cars and enforcing
intellectual property of foreign firms—something that the Trump administration
has been eyeing for some time.
Higher crude oil price is always a
concern for country like Pakistan which imports more than 70 percent of oil
requirement. Government's still is falling short of target, worries about not
letting fiscal deficit widen any further is a tough ask. However, imports remained
under pressure due to continuation of oil prices on the higher side. The
increase in fuels imports (oil, coal and LNG), both in terms of price as well
as quantities, kept the balance of trade around $3 billion in March 2018.
The
government may ask state oil marketing companies to absorb a potential hike on
petrol and diesel retail prices or even by the centre in the run-up to the General
Elections when OMCs were not allowed to hike prices in line with increase in
global crude prices.
The final hour Stock Market saw
activity somewhat improving as local institutional investors became active in
select index names across E&Ps (+0.3%), fertilizers (-0.4%) and financials (-0.5%).
Foreign Institutional Investors
were net buyers of $3.84 million worth of shares during the Thursday’s trading
session.
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