Shares of Bharat Petroleum Corporation was the worst performing stock in the BSE Oil & Gas index and closed at Rs 380.10, down by 7.04% or Rs 28.80.
Shares of oil marketing companies (OMCs) saw a sharp fall on Monday as global oil prices surged due to the attack on Saudi Arabian refining facilities, which disrupted global oil supply. Prices of Brent opened at $66.45 per barrel and went up to $71.95 intra-day on Monday following the drone strikes on Saudi crude oil infrastructure.
Shares of Bharat Petroleum Corporation was the worst performing stock in the BSE Oil & Gas index and closed at Rs 380.10, down by 7.04% or Rs 28.80. Hindustan Petroleum Corporation and Indian Oil Corporation fell by 5.70% and 1.15%, respectively. The BSE Oil & Gas index ended at 13,419.66, down by 219.68 points or 1.61%.
On Saturday, a number of drones attacked two critical pieces of Saudi crude oil infrastructure, the Abqaiq processing facility of 7 million barrels per day capacity (mb/d) and the 1.45 mb/d Khurais field. These attacks have disrupted production of 5.7 mb/d, which is equal to almost 5% of the world supply. Saudi currently supplies 9.8 mb/d of oil, equal to 10% of global supply.
Sunil Sharma, chief investment officer, Sanctum Wealth Management, in its investment strategy commentary note said, “Oil importers are likely to be affected, as are companies with raw material imports, and oil derivative imports. Should the move on crude sustain, margins are likely to be impacted, yet again for sections of the market. The weakness in the rupee should it unfold would be immediately attractive for IT, pharma.”
“Unlike other major oil suppliers like the US and Russia, which rely on numerous producers spread out over large geographical areas, Saudi Arabia’s production is reliant on a single entity which is Saudi Aramco,” said CARE Ratings. It also said the price of Brent crude oil will be range bound between $70 and $75 per bbl in coming few months till normalcy is restored to Saudi production.
India had been a beneficiary of lower crude prices in recent times. “… we may foresee an increase in petrol and diesel prices in the coming few days, depending on how the oil markets react in the reduction in supply,” CARE added.