Shares of oil marketing companies (OMCs) extended their gains for the third consecutive session on Wednesday as a decline in global crude oil prices boosted investor sentiment.
The uptrend comes after the Organization of the Petroleum Exporting Countries and its allies (OPEC+) decided to gradually increase production, a move seen as favourable for India’s refiners as it improves their gross marketing margins on retail fuel.
Shares of Hindustan Petroleum Corporation Ltd (HPCL) surged 6.12 percent to touch an intraday high of Rs 334.5 on the National Stock Exchange (NSE). The stock has gained 13.22 percent over the past three sessions. Bharat Petroleum Corporation Ltd (BPCL) also advanced 2.59 percent to Rs 256.41 apiece, extending its three-day rally to nearly 8 percent.
Similarly, Indian Oil Corporation Ltd (IOC) climbed 3.35 percent to an intraday high of Rs 122 per share on the NSE. The stock has gained 7 percent over the past three sessions.
The OPEC+ alliance has decided to proceed with a planned output hike of 138,000 barrels per day, marking the first increase since 2022. The additional supply has weighed on crude oil prices, which is seen as beneficial for fuel retailers.
Brent crude, the global benchmark, declined 0.34 percent to USD 70.80 a barrel. Analysts at Emkay Global expect Brent prices to fall to the USD 60 per barrel range, although they believe the USD 70-75 per barrel range is more probable compared to the earlier USD 75-80 per barrel level.
Meanwhile, reports from Reuters suggest that the United States is considering a plan to ease sanctions on Russia and address the ongoing conflict in Ukraine. A potential relaxation of sanctions could lead to more Russian crude entering the global market, further pressuring oil prices.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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