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Last Updated : Feb 24, 2016 11:30 AM IST | Source: Moneycontrol.com

IOC, BPCL, HPCL up 2-3% as oil prices tank on Saudi oil min view

Analysts believe this fall in oil prices started since June 2015 continued to be beneficial for country like India which is the major oil importer. Brent oil prices fell from USD 140-150 a barrel levels in June to around USD 30 a barrel (currently).

 
 
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Moneycontrol Bureau


Shares of IOC, HPCL and BPCL (the state-owned oil marketing companies) gained 2-3 percent on Wednesday following steep correction in oil prices yesterday post comments from Saudi oil minister on production cut.


US oil prices fell as much as 5 percent on Tuesday after Saudi Oil Minister Ali Al-Naimi ruled out any production cuts, restating the kingdom's rationale for maintaining output was that demand would pick up excess crude that has crushed prices over the past 20 months.

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Last week big oil exporters Saudi Arabia and Russia have proposed to freeze output at January levels, which were near record highs, only if other producers also do the same.


"Freeze is the beginning of a process, and that means if we can get all the major producers to agree not to add additional balance, then this high inventory we have now will probably decline in due time. It's going to take time," Naimi said.


"It is not like cutting production. That is not going to happen because not many countries are going to deliver even if they say they will cut production — they will not deliver. So there is no sense in wasting our time seeking production cuts," he added.


International benchmark Brent crude futures were down USD 1.44, or 4.18 percent, at USD 33.24 a barrel and US crude futures fell USD 1.52, or 4.55 percent, to settle at USD 31.87 a barrel on Tuesday. On Wednesday also, oil extended losses with Brent down 1.4 percent and WTI falling 2.3 percent.


Analysts believe this fall in oil prices started since June 2015 continued to be beneficial for country like India which is the major oil importer. Brent oil prices fell from USD 140-150 a barrel levels in June to around USD 30 a barrel (currently).


Strong gross refining margin due to fall in crude oil prices boosted profitability of these oil retailers. BPCL's Q3FY16 profit jumped 46 percent year-on-year to Rs 1,489 crore while IOC reported profit of Rs 3,057 crore and HPCL's profit at Rs 1,042.3 crore.

At 10:44 hours IST, the scrip of Indian Oil Corporation was quoting at Rs 370.25, up 1.97 percent. Hindustan Petroleum Corporation rose 2.79 percent to Rs 661.60 and Bharat Petroleum Corporation climbed 3.19 percent to Rs 760.80 on the BSE.

(With inputs from CNBC)

First Published on Feb 24, 2016 11:30 am
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