Moneycontrol
Last Updated : Dec 26, 2018 10:32 AM IST | Source: Moneycontrol.com

HPCL, BPCL, IOC, Jet Airways, SpiceJet gain 1-3% as Brent oil prices near $50/barrel

Crude is the key raw material for oil marketing companies and a major portion of operating expenses for airline firms. So any fall in oil prices is always beneficial for these companies including paint makers.

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Hindustan Petroleum Corporation, Bharat Petroleum Corporation, Indian Oil Corporation, Jet Airways and SpiceJet shares gained 1-3 percent in morning on Wednesday after sharp fall in crude oil prices amid global growth concerns.

Crude is the key raw material for oil marketing companies and a major portion of operating expenses for airline firms. So any fall in oil prices is always beneficial for these companies including paint makers.

Brent crude oil futures, the international benchmark for oil prices, plunged 6.2 percent on Tuesday to $50.47 a barrel, the weakest since August 2017. Oil prices slipped nearly 20 percent year-to-date and crashed 42 percent from $86 a barrel touched on October 3, 2018.

Investors globally worried about economic slowdown amid higher US interest rates and the US-China trade dispute.

In addition, OPEC and allies led by Russia agreed earlier this month to cut oil production by 1.2 million barrels per day from January. Russian Energy Minister Alexander Novak said on Tuesday that oil prices would become more stable in the first half of 2019, supported by OPEC and non-OPEC countries' joint efforts to cut output.

Elsewhere, US political turmoil triggered by the partial shutdown of the federal government is also adding to market concerns. President Donald Trump said on Tuesday that shutdown could last until his demand for US-Mexico border wall money is met.

US West Texas Intermediate (WTI) crude futures slumped 6.7 percent on Tuesday to $42.53 a barrel - the lowest since June 2017. (With inputs from agencies)

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First Published on Dec 26, 2018 10:27 am
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