With crude oil prices falling close to 3%, a day after registering a 20% jump, oil marketing companies (OMC), paint manufacturers, natural gas distributors and domestic crude explorers are sending mixed signals.
With crude oil prices falling close to 3%, a day after registering a 20% jump, oil marketing companies (OMC), paint manufacturers, natural gas distributors and domestic crude explorers are sending mixed signals on the bourses. While Indian Oil Corporation is down by 0.57 per cent and Hindustan Petroleum Corporation Limited has fallen 1.5 per cent, Bharat Petroleum Corporation Limited has refused to stay in the red after plummeting 5% during the early trade only to recover. Brent Crude had went up by 21% on Thursday and the US West Texas Intermediate (WTI)crude shot up by 24.7%, after United States President Donald Trump claimed to have brokered a deal between Saudi Arabia and Russia to cut output.
Paint manufacturing companies like Asian Paints down by 4.43% to trade at Rs 1532 per share, Kansai Nerolac Paints Ltd fell 2.28% to Rs 378 apiece while Berger Paints India Ltd saw the biggest fall of 6.3% as the scrip traded at Rs 454 per share. Pain manufacturer’s shares too were mixed as Shalimar Paints Limited cruised up to trade in the green after tanking 6.8% in the initial minutes of trade on Friday. Natural gas distributors like Indraprastha Gas Limited and GAIL enjoyed run in the green territory while Gujarat Gas took a fall.
India’s leading company when it comes to oil and natural gas exploration, ONGC was up 4.5% on the bourses, trading at Rs 68.60 per share. Although Crude Oil prices tanked on Friday, they were still up considerably after the jump in prices on Thursday. “An output cut deal that balances the market will put a floor under oil price and would be positive for ONGC,” said analysts at ICICI Securities while recommending to hold the share with a target price of Rs 66.
“Crude oil has turned choppy after testing the lowest level since 2002 earlier this week. Weighing on crude price is API weekly report which noted a sharp 10.485 million barrels increase in US crude oil stocks highlighting well supplied US market. Also weighing on price are demand concerns as virus spread continues to remain out of control indicating that restrictions may remain in place for a long time. Crude was also pressurized by Saudi’s stance to boost exports in May due to lower domestic demand,” said analysts at Kotak Securities. According to ICICI Securities, a cut in output could provide some flooring for the falling crude oil prices as global demand plummets owing to the coronavirus pandemic.