HPCL, BPCL, Indian Oil shares surges as crude oil prices declines over three-month low

On Tuesday, March 4, shares of India's state-owned oil refiners, Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd., and Hindustan Petroleum Corporation Ltd., jumped as high as 3%.

Stocks rose after global crude oil prices dropped to a three-month low overnight. This decline came after the Organization of Petroleum Exporting Countries (OPEC) alliance announced a plan to increase oil production, which had been on hold for an extended period.

According to a statement on the group’s website, the alliance, led by Saudi Arabia and Russia, will implement an increase of 138,000 barrels per day in April. The move will mark the first of several monthly production hikes aimed at gradually restoring a total of 2.2 million barrels per day by 2026, following more than two years of reduced output.

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Crude oil traders widely anticipated that OPEC+ would postpone the restart of production once again. This delay follows three previous postponements since the announcement of a supply roadmap last June.

Oil prices remain too low for Saudi Arabia and many other member countries to cover their government spending adequately, and global markets are projected to experience a supply surplus later this year.

Consequently, the recent decision adds to the downward pressure on oil prices, which had already decreased by more than 10% since mid-January before this announcement.

Shares of HPCL are trading 3.7% higher at Rs 308.8. BPCL shares are trading 1.4% higher at Rs 245. IOC shares are up 2.5% at Rs 117.5.

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