Oil and gas stocks plunged up to 5 per cent after crude oil prices tumbled following a cut by Saudi Arabia in October selling prices. Also, coronavirus cases rebounded in many countries in the world which could sap fuel demand. The S&P BSE Oil & Gas index fell nearly 2 per cent to 12,634 levels. The top index loser was oil exploration and distribution firm Oil and Natural Gas Corporation (ONGC), which fell nearly 5 per cent to Rs 70.90 apiece. Similarly, GAIL India shares declined 3.7 per cent to Rs 90.85 apiece. On Tuesday, international oil prices tumbled with Brent closing below the $40 level mark for the first time since June. Brent “MCX Crude Oil September gave a breakdown below 100-Days Moving Average at 2722 levels below which will continue sideways to Bearish momentum in the coming sessions,” said Sriram Iyer, Senior Research Analyst at Reliance Securities.
Oil marketing companies (OMCs) such as Indian Oil (IOCL), Bharat Petroleum Corporation (BPCL) and HindPetro (HPCL) shares skid up to 3 per cent during the trade. The only gainers on the S&P BSE Oil & Gas index were Reliance Industries which was up 0.82 per cent and Castrol India with 0.63 per cent gain. Along with the Saudi Arabia’s decision to cut pricing for October crude sales in Asia and the US as demand remained stuck below pre-Covid levels, analysts believe that the recent recovery in oil prices boosted the US companies to ramp up drilling of new supplies which further weighed on the crude prices. “OPEC and its allies are scheduled to meet on September 17, 2020, to review the oil market scenario. For today traders can go for sell in Crude oil at 2700 levels, with the stop loss of 2760 levels and for the target of 2600 levels,” said Anuj Gupta, DVP- Commodities and Currencies Research, Angel Broking Ltd.
S&P BSE Oil & Gas index hit a 52-week low of 8,723.9 in March this year, as fuel demand stumbled in the wake of coronavirus pandemic. Since then it appreciated 45 per cent on the back of unlocking phase in India and elsewhere. At 11.30 AM, the WTI crude oil was trading 0.38 per cent lower at $36.62 per barrel while Brent Crude stood at $39.67 per barrel, down 0.28 per cent, according to the Bloomberg data.