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Petrobras (PBR) Rebalances With Market Via Fuel Price Hike
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Petrobras (PBR - Free Report) , the state-owned oil and gas company of Brazil, increased domestic fuel prices to bridge a cost gap with foreign markets, a move that will likely accelerate inflation while also appeasing investors.
According to the company, average gasoline prices will increase 16.3% to 2.93 reais (~$0.59) per liter, while diesel prices will surge an average 25.8% to 3.80 reais per liter. The tweak was required to rebalance with the market and the marginal values of the company following a recent rise in crude oil prices, per a statement from Petrobras.
The amount of the hike startled several analysts. As a result, they anticipate that Brazil's consumer price growth will also increase. According to Roberto Campos Neto, the governor of Brazil's central bank, the huge surge will have an inflationary impact of 0.40 percentage points in August and September, which would lead to upward revisions in expectations for Brazil’s benchmark index.
According to Centro Brasileiro de Infraestrutura, Petrobras has been selling fuels below international levels for the most of this year. The boost to its refinery gate pricing reduces the discount to international levels to 22% for diesel and 9% for gasoline. Per a report from Goldman Sachs analysts, the move shows that Petrobras will probably not meaningfully subsidize fuel prices in Brazil and imports into the country will likely remain profitable, thereby keeping the market well supplied.
Zacks Rank & Key Picks
Currently, Petrobras carries a Zack Rank #3 (Hold).
Some better-ranked stocks in the energy space are CVR Energy Inc. (CVI - Free Report) , Evolution Petroleum Corporation (EPM - Free Report) and Crestwood Equity Partners LP . While CVI sports a Zacks Rank #1 (Strong Buy), both EPM and CEQP carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CVR Energy is an independent refiner and marketer of high value transportation fuels. Headquartered in Sugar Land, TX, CVI has 1,470 employees. It is also engaged in nitrogen fertilizer manufacturing business through its interest in CVR Partners, LP.
Evolution Petroleum is an independent energy company. It was formed to acquire and develop oil and gas fields and apply both conventional and specialized technology to accelerate production, particularly in low-permeability reservoirs. EPM has witnessed an upward earnings estimate revision for 2024 in the past 60 days.
Headquartered in Houston, TX, Crestwood is a master limited partnership that provides a wide range of fee-based infrastructure solutions in major U.S. shale plays like the Bakken Shale, Delaware Basin, Powder River Basin, Marcellus Shale and others. The company is least exposed to commodity price fluctuations since it generates stable fee-based revenues from diverse midstream energy assets via long-term contracts.
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Petrobras (PBR) Rebalances With Market Via Fuel Price Hike
Petrobras (PBR - Free Report) , the state-owned oil and gas company of Brazil, increased domestic fuel prices to bridge a cost gap with foreign markets, a move that will likely accelerate inflation while also appeasing investors.
According to the company, average gasoline prices will increase 16.3% to 2.93 reais (~$0.59) per liter, while diesel prices will surge an average 25.8% to 3.80 reais per liter. The tweak was required to rebalance with the market and the marginal values of the company following a recent rise in crude oil prices, per a statement from Petrobras.
The amount of the hike startled several analysts. As a result, they anticipate that Brazil's consumer price growth will also increase. According to Roberto Campos Neto, the governor of Brazil's central bank, the huge surge will have an inflationary impact of 0.40 percentage points in August and September, which would lead to upward revisions in expectations for Brazil’s benchmark index.
According to Centro Brasileiro de Infraestrutura, Petrobras has been selling fuels below international levels for the most of this year. The boost to its refinery gate pricing reduces the discount to international levels to 22% for diesel and 9% for gasoline. Per a report from Goldman Sachs analysts, the move shows that Petrobras will probably not meaningfully subsidize fuel prices in Brazil and imports into the country will likely remain profitable, thereby keeping the market well supplied.
Zacks Rank & Key Picks
Currently, Petrobras carries a Zack Rank #3 (Hold).
Some better-ranked stocks in the energy space are CVR Energy Inc. (CVI - Free Report) , Evolution Petroleum Corporation (EPM - Free Report) and Crestwood Equity Partners LP . While CVI sports a Zacks Rank #1 (Strong Buy), both EPM and CEQP carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CVR Energy is an independent refiner and marketer of high value transportation fuels. Headquartered in Sugar Land, TX, CVI has 1,470 employees. It is also engaged in nitrogen fertilizer manufacturing business through its interest in CVR Partners, LP.
Evolution Petroleum is an independent energy company. It was formed to acquire and develop oil and gas fields and apply both conventional and specialized technology to accelerate production, particularly in low-permeability reservoirs. EPM has witnessed an upward earnings estimate revision for 2024 in the past 60 days.
Headquartered in Houston, TX, Crestwood is a master limited partnership that provides a wide range of fee-based infrastructure solutions in major U.S. shale plays like the Bakken Shale, Delaware Basin, Powder River Basin, Marcellus Shale and others. The company is least exposed to commodity price fluctuations since it generates stable fee-based revenues from diverse midstream energy assets via long-term contracts.