Shares of India’s largest public sector enterprise Indian Oil Corporation Ltd hit lowest since December 2016 on Thursday as the stocks of oil marketing companies tumbled for the second straight session today after witnessing a major rot in yesterday’s trade. Shares of all three major oil marketers Indian Oil Corporation Ltd, Hindustan Petroleum Corporation Ltd, Bharat Petroleum Corporation Ltd extended their respective losses on Thursday as crude oil prices went up above the $72 per barrel mark at the international markets. The Brent crude jumped 0.6% to $72.49/barrel and US West Texas Intermediate went up by 0.76% to $67.33/barrel on Thursday.
The stock of Indian Oil Corporation Ltd tanked 5.09% to a 15-month low of Rs 159.25; Hindustan Petroleum Corporation Ltd shares crashed 3.3% to a 9-month low of Rs 326 while the shares of Bharat Petroleum Corporation Ltd plunged 3.66% to a 10-month low of Rs 402.2. Shares of HPCL and BPCL were at their lowest respective levels since June and July 2017. The selling pressure in the oil marketing companies continued as oil prices hover near 2014-highs. Oil markets remain tense on concerns over a military escalation in Syria with Brent crude futures topping a level of $72.49 per barrel on Thursday.
OMC earnings still appear uncertain as subsidy risks mount in the face of rising crude and inadequate subsidy provisions in the budget, Reuters reported citing a Jefferies report. “Still prefer the cheaper and more resilient” Jefferies Indian Oil Corp to HPCL or BPCL. See real risk that even OMCs will be asked to take a portion of the subsidy burden if the govt does not take the full burden, CLSA was seen as saying in a Reuters report.
“The oil markets remained tense on Thursday on concerns over a military escalation in Syria, although prices remained some way off Wednesday’s highest since late 2014 as bulging American supplies weighed,” Reuters added.