US President Donald Trump's executive order to boost American oil production and a tariff threat on Canadian oil sent international crude prices sharply lower, which in turn lifted shares of domestic oil marketing companies on a day of intense market selloff.
Shares of IOC, HPCL and BPCL ended the session with gains of 0.5%, 2.7% and 1.1% respectively on a day the benchmark Nifty 50 fell by 1.4% to wipe off more than Rs 7.2 lakh crore in market capitalization.
Trump's declaration of a national energy emergency, in an effort to boost oil and gas production triggered a sharp fall in crude oil prices, with Brent falling below $80 per barrel and West Texas Intermediate near $77. The anticipation of rise in oil production after Trump’s 'drill baby drill' focus was a major factor behind the crude cooloff.
India could also increase its purchases of US oil and gas after President Donald Trump's executive order to ramp up crude oil production. "There is a possibility of more energy purchase between India and US," Oil Minister Hardeep Singh Puri said on the sideline of an event on January 21. "More US energy coming into the market is welcome," he added.
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So far this year, Brent Crude prices have been higher by more than 4.4% on the back of higher heating demand in the northern hemisphere and US sanctions on Russia’s oil industry and tankers. Sweeping American sanctions targeting Russia have disrupted supplies and tightened the availability of vessels. Following the sanctions, Reuters reported on January 21 citing people familiar with the development that refiners BPCL and MRPL have issued tenders this week seeking crude oil supplies.
The state-owned oil refining companies have also asked Abu Dhabi National Oil Company (ADNOC) for an offer price of its crude, Reuters said citing three refining industry sources.
Trump’s nominee for Treasury secretary has hinted at more measures against Moscow, which could result in further disruption in the world oil market.
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