RIL shares hit record high, ONGC jumps up to 2% after US raids Venezuela: Here's what analysts say

RIL, ONGC share price

• Oil-linked stocks like ONGC and Reliance rose after US raided Venezuela
• Reliance hit a 52-week high, market cap nears Rs 22 lakh crore
• US takeover of Venezuela may impact global oil prices and supply

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Shares of oil-linked companies rose in early trade on January 5 after the US raided Venezuela, abducting its President Nicolás Maduro and his wife. Analysts said these stocks may benefit from rising tensions.

Oil & Natural Gas Corporation (ONGC) shares jumped 2 percent in the early trading hours of Monday, rising to Rs 246.80 apiece, before paring all gains and closing in the deep red. Reliance Industries (RIL) shares meanwhile rose more than 1 percent to hit a fresh 52-week high of Rs 1,611.8 apiece, also paring all gains later to close in the red.

The rise in Reliance Industries' stock pushed the market value of India’s most valuable company closer to the Rs 22 lakh crore mark.

US raids Venezuela:

The US carried out operation ‘Absolute Resolve’, carrying out airstrikes on targets across Venezuela and capturing its President and First Lady. This came after months of mounting military and economic pressure.

"We are going to run the country," US President Donald Trump said, adding that he did not want the Maduro system to continue under a replacement leader. He repeated the framing of an interim US-led handover, "We are going to run the country until such time that we can do a safe, proper and judicious transition."

“We are going to run the country right… It’s going to make a lot of money. They stole our oil,” Trump said, adding, “We’ll be selling large amounts of oil to other countries.”

Oil prices:

Oil prices inched up on Monday as investors weighed whether political upheaval in OPEC member Venezuela would disrupt shipments after US President Donald Trump seized Venezuelan President Nicolas Maduro, in a well-supplied market.

However, some analysts expect the development to lower oil prices. Jefferies said that the potential US takeover could lift sanctions on Venezuelan crude exports.

Reliance Industries may source crude at $5–8/bbl discount to Brent, boosting gross revenue margins, Jefferies added. It further said that ONGC could receive around $500 million in unpaid dividends from San Cristobal Field.

Listing out the medium-term risk, Jefferies said that revived Venezuelan output may pressure global crude prices.

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