Shares of oil marketing companies Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp surged 2-7 percent in early trade on May 2 tracking a slump in prices of Brent crude to its lowest levels in two months.
Brent oil prices slipped below $84 per barrel, falling over 7 percent in the last three sessions amid a spike in US crude inventories along with growing hopes of a ceasefire in the Middle East. A rise in US crude inventories hint at softness in demand in the world's largest economy, which weighs on the prices of Brent oil.
This comes after Brent oil prices hit the $90-mark last month, its highest since October last year and remained elevated on the back of concerns of supply disruptions due to geopolitical tensions in the Middle East.
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A fall in Brent crude prices bodes well for oil marketing companies as it lowers their input costs, giving them more headroom to keep competitive prices which eventually aids their margins.
Consequently, at 11.53 am, shares of HPCL were trading over 7 percent higher while IOCL and BPCL were up around 3 percent and 4 percent, respectively, on the NSE.
While Indian Oil Corp released its Q4FY24 earnings on April 30, Hindustan Petroleum and Bharat Petroleum are slated to announce their quarterly numbers on May 9.
IOC's consolidated net profit slipped 49 percent year-on-year to Rs 5,487.92 crore in the January-March period, dragged by a spike in oil prices in the quarter. Crude oil prices rose 16 percent in the first three months of 2024 amid growing geopolitical instability in the Middle East.
Revenue also declined, albeit marginally, to Rs 2.23 lakh crore in Q4FY24 as compared to Rs 2.3 lakh crore in the year-ago period.
Also Read | Crude oil near two-month low as US inventories rise on worries over demand
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