Shares of Oil and Natural Gas Corporation slipped 3 percent in early trade on December 7 on the back of a steep fall in Brent crude prices to five-month lows.
Brent crude prices have declined 11 percent in the last five sessions to below $75 a barrel on the back of a surge in US gasoline inventories which, along with prevailing concerns over lagging demand, dented sentiment.
Upstream oil companies like ONGC stand to be hit negatively by a fall in crude prices as it reduces their refining margins. Hence, shares of ONGC, along with other oil refiners like Oil India and Hindustan Oil Exploration Company struggled with losses in today's session.
At 11.15am, shares of ONGC were trading 2.2 percent lower at Rs 127.55 on the National Stock Exchange.
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Enjoying the benefit of a gradual increase in crude prices over the quarter, ONGC had reported a 142 percent on-year surge in consolidated net profit for the July-September period.
The sharp spike in the bottomline came despite a 12.9 percent decline in revenue from operations during the quarter to Rs 1.46 lakh crore as against Rs 1.68 lakh crore in the base period.
Brokerage firm CLSA, which has a 'buy' call on the stock, had also attributed the surge in ONGC's net profit to improved realisations due to higher oil prices and reduced costs.
Also read | Crude oil prices at 5-month low as market frets weaker demand
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