The shares of several oil marketing companies (OMC) and oil & gas firms strongly gained on June 11 as falling oil prices boosted investor sentiment on hopes for better margins. The sharp rise in the share prices pushed the Nifty Oil & Gas index up nearly 1.7 percent in the morning. Also, what boosted the oil & gas stocks is that an US body sees oil prices falling near-term.
The US Energy Information Administration sees oil prices falling in the near term due to a rise in global inventories. The organisation sees Brent crude oil falling to $61 per barrel by end of 2025 from $64 per barrel in May, and averaging $59 per barrel in 2026.
Oil prices softened on June 11 as investors assessed the impact of US-China trade talks, which were held in London, and are yet to be reviewed by US President Donald Trump. Weak demand from China and lower OPEC+ production continued to weigh on the oil prices.
Brent Crude futures dropped 0.3 percent to trade at $66.680 per barrel, while US West Texas Intermediate crude fell 0.3 percent to $64.82 per barrel, according to data cited by Reuters. Investors now await US President Donald Trump's announcement of the outcome of the trade talks.
Additionally, 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.
Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL) shares jumped nearly 4 percent to trade at Rs 421 apiece and Rs 332 apiece respectively. Indian Oil Corporation (IOC) shares meanwhile gained 2.5 percent to hover around Rs 146 apiece.
Reliance Industries shares meanwhile jumped around 1.6 percent to trade at Rs 1,461 apiece, thus hitting their eight-month high. Notably, the shares of India's most valuable company were the top gainer on the benchmark index Sensex. ONGC was the top Nifty gainer on June 11 by rising 2%.
Oil India shares also made significant gains, rising nearly 3 percent to trade at Rs 449 apiece. Notably, falling oil prices were likely to negatively impact the stock. However, the shares may have been boosted after Avendus Spark initiated a 'Buy' call on the stock, with a target price of Rs 630 per share. This implies a strong upside potential of over 44 percent from the stock’s previous closing price of Rs 437 per share.
Oil prices have consistently been under $70 per barrel since the start of April amid concerns over production hikes by the Organisation of Petroleum Exporting Countries and its allies.
(With inputs from Reuters)
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.
Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
