BPCL, HPCL and IOC rises over 3% with sharp fall in crude oil price

New Delhi: The shares of oil marketing companies such as BPCL, HPCL, and Indian Oil opened higher in Wednesday's trading session, following a sharp drop in crude oil prices on Tuesday.

This decline was attributed to improved conditions in the Middle East. Crude oil futures closed significantly lower on Tuesday, as worries about supply disruptions eased amid reports that Israel is unlikely to target Iranian oil facilities and instead plans to focus on Iranian military installations.

Concerns about a potential slowdown in Chinese demand also weighed on the market, as worries about the Chinese growth outlook persisted. Although China's National Development and Reform Commission announced plans for additional measures to stimulate the Chinese economy, specific details were not provided.

Benchmark crude oil futures for November delivery fell by $3.57 or about 4.63%, settling at $73.57 a barrel on the New York Mercantile Exchange. Brent crude for December delivery dropped by $3.75 or about 4.63% to settle at $77.18 a barrel on London's Intercontinental Exchange.

Amidst the fall, major oil marketing companies like Bharat Petroleum jumped 2.2%, while Hindustan Petroleum jumped over 4.5% higher and traded at Rs 409 apiece on the NSE. Indian Oil Corporation shares also traded 1.5% higher on Wednesday morning. On a YTD basis, crude oil prices have largely remained stable, with nearly 2% gains in 2024. The Brent crude oil prices too, remained in a flat range in a similar period.

Though war-like conditions in the Middle East region remain a key overhang for OMCs, the over supply situation in the global market is expected to keep the oil prices in range.