Shares of oil and gas companies, including Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL), Bharat Petroleum Corporation (BPCL), and GAIL, climbed up to 3% in intraday trade on the BSE on Wednesday, 30 September, amid a drop in crude oil prices.
Stocks like Petronet LNG, Indraprastha Gas, and Reliance Industries also gained significantly during the session.
On the other hand, shares of upstream exploration and production companies, such as ONGC and Oil India, declined 1% and 3%, respectively, during the session.
Why are crude-linked stocks rising?
Crude oil-linked stocks are seeing decent gains despite a decline in oil prices. Crude oil prices suffered their biggest drop in more than a week, falling 2.5% on Tuesday, amid signs that Middle East supply has risen to near pre-war levels after Saudi Arabia resumed shipments from its Red Sea port of Yanbu, which avoids the Strait of Hormuz.
International crude oil benchmark, Brent Crude, traded near $103 per barrel on Wednesday morning.
A drop in crude prices tends to benefit oil marketing stocks, as it boosts their marketing margins on petrol and diesel retail sales. However, a drop in oil prices is negative for upstream exploration and production companies, as their revenues and realisations decline.
(This is a developing story. Please check back for fresh updates.)
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