Oil starts simmering again

With the crude oil boiling up to ~$85, the global exploration and production capex of major companies is expected to witness significant increase. Among the Indian oil firms, exploration behemoth ONGC has allocated close to Rs 26,500 crore for E&P spending. If crude oil sustains at current levels, the utilization/day rates of oil rigs are expected to improve. Good opportunities in the markets are few as majority of the quality stocks in different industries have become expensive. Oil servicing companies like Aban Offshore, Shiv Vani Oil, HOEC and Great Offshore are interesting stock ideas which can be bought keeping the rally in oil in mind. Besides this ship building companies like Bharti Shipyard, which have come down significantly from the recent highs are also good stocks to add to your portfolio. Fallout of this increased demand for oil will be also manifest in terms of renewed interest in alternate energy companies. Hence companies like Suzlon, Indowind Energy, Moser Baer and Praj Industries can also be bought on every decline.