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Why did Petrobras (PETR4) rise this Wednesday, despite the fall in oil?

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Petrobras’ hike this Wednesday is an adjustment move, says analyst (Image: Diana Cheng/Money Times)

The preferred shares of Petrobras 🇧🇷PETR4) closed in the blue this Wednesday (23), contradicting the fall of junior oil companies and oil prices Petroleum in international markets.

The company’s share advanced 0.47%, quoted at R$ 23.44. The contracts of Brent for delivery in January fell 3.3% to US$ 85.41 a barrel, while the WTIoil from United Stateslost 3.7% to $77.94 a barrel.

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The drop reflects rising inventories in the US. Gasoline inventories rose 3.1 million barrels, according to the Energy Information Administration, handily beating analysts’ forecast for an increase of 383,000 barrels.

Phil Flynn, an analyst at Price Futures Group, says the rise in inventories suggests “perhaps we are seeing demand weaken or that gasoline is suffering ahead of the holidays.”

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Oil prices were also knocked down by reports that the oil price cap G7 for the Petroleum Russian could stay above the level being traded.

G7 nations are considering a price cap for the Petroleum Russian seaborne oil in the range of $65-70 a barrel, according to a European official.

Why did PETR4 go up?

Leandro Petrokas, director of research and partner at Quantzed, explains that the increase in Petrobras this Wednesday is an adjustment movement, “a cooling of the selling force because the share fell in two weeks by around 33%”.

Petrokas points out that the market did not like the result of the elections and sees the new pricing policy from the state.

The analyst draws attention to the fact that the stock is being traded at very cheap multiples.

“Despite today’s high, stocks have accumulated a fall of around 29% since the pre-election maximum”, he points out.

Even so, Petrokas reinforces that there are high uncertainties involving the company’s future profit due to the pricing policy that will be adopted by the new government. The risk of interference also weighs on the prospects for the thesis.

“Due to this distrust, the market has been hitting Petrobras shares”, says the analyst, referring to the post-election accumulated drop.

Petrobras common shares closed stable at R$ 27.07.

Check out the five biggest rises on the Ibovespa this Wednesday:

Company ticker Variation
Rede D’Or RDOR3 +3.57%
Marfrig MRFG3 +3.16%
South America SULA11 +2.95%
BB Security BBSE3 +2.41%
Gerdau GGBR4 +1.42%

Check out the five biggest falls on the Ibovespa this Wednesday:

Company ticker Variation
CVC Brazil CVCB3 -7.22%
sky CIEL3 -6.82%
Americans AMER3 -5.36%
Sum SUM3 -4.32%
Natura NTCO3 -4.20%

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Source: Moneytimes

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