>Indian Oil & Gas, Chemicals (J P MORGAN)

• Special Focus - Dollar decline: The dollar index has pulled back 3% this quarter, and with the Fed unlikely to intervene significantly, J.P. Morgan analysts now expect a 2Q10 bottom for the dollar. This decline has masked a softening in crude, which has remained flat in Euro terms. With crude fundamentals under pressure, we expect softer crude prices will benefit downstream India R&M cos and negatively impact Cairn.

• News feed: GSPC sells a 5% stake to institutions, BPCL’s Wahoo block shows potentially large reserves, IOCL cuts jet fuel rates, PLNG expects Qatar gas in Jan '10, and may buy a stake in OPaL, Jubilant Energy finds gas in Assam Arrakan basin and more.

Feedstock- Vol XVII- Dollar decline masks crude weakness

• Feedstock Trends: Oil prices inched up with increased volatility in the Middle East, following the Dubai crisis. Inventories continued to build, with a much higher than expected number across crude, gasoline and distillates. Refining margins across Europe remain muted.

• Stock Feed: The BSE Oil & Gas Index was up 3% in the last fortnight, outperforming the broader market. BPCL was the stand-out performer, rising 16.5% on the back of news of confirmation of reserves in the Wahoo block in Brazil.

To read the full report: INDIAN OIL