IndianOil, BPCL, HPCL: Crude-sensitive stocks in focus as OPEC+ agrees to raise output; details to know

The shares will be in focus after oil prices extended their decline in early trade after OPEC+ agreed to another large production hike in September, with concerns about a slowing economy in the US, the world's biggest oil user, adding to the pressure.

Brent crude futures fell 40 cents, or 0.57%, to $69.27 a barrel by 6:45 AM while U.S. West Texas Intermediate crude was at $66.96 a barrel, down 37 cents, or 0.55%, after both contracts closed about $2 a barrel lower on Friday.

It must be noted that the US job market slowed sharply in July and was substantially weaker than first estimated for prior months, suggesting that President Trump's trade policy may be stifling hiring.

The US economy added just 73,000 jobs last month, and the monthly totals for May and June were revised down by a combined 258,000 jobs.

The prior two months’ revisions were “stunning,” said Diane Swonk, chief economist at KPMG, in an interview with CNN.

The decision is expected to lower oil and gasoline prices.

The Organisation of the Petroleum Exporting Countries and their allies, known as OPEC+, met virtually on Sunday and announced that eight of its member countries would increase oil production by 547,000 barrels per day in September.

The countries boosting output, including Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman, had been participating in voluntary production cuts, initially made in November 2023, which were scheduled to be phased out by September 2026.

The announcement means the voluntary production cuts will end ahead of schedule.

The move follows an OPEC+ decision in July to boost production by 548,000 barrels per day in August. OPEC said the production adjustments may be paused or reversed as market conditions evolve.

When production increases, oil and gasoline prices may fall. But Brent crude oil, which is considered a global benchmark, has been trading near USD 70 per barrel, which could be due to a potential loss of Russian oil on the market and a large rise in crude inventories in China, according to research firm Clearview Energy Partners.

“President Trump has not obviously relented from his threat to sanction Russian energy if the Kremlin does not reach a peace deal with Ukraine as of August 7, potentially via “secondary tariffs” on buyers,” Clearview Energy Partners said in an analyst note Sunday.

The eight countries will meet again on September 7, OPEC said in a news release.

"While OPEC+ policy remains flexible and the geopolitical outlook uncertain, we assume that OPEC+ keeps required production unchanged after September," analysts at Goldman Sachs said in a note, adding that solid growth in non-OPEC output would likely leave little room for extra OPEC+ barrels.

Meanwhile, investors remain wary of further US sanctions on Iran and Russia that could disrupt supplies. US President Trump has threatened to impose 100% secondary tariffs on Russian crude buyers as he seeks to pressure Russia into halting its war in Ukraine.

At least two vessels loaded with Russian oil bound for refiners in India have diverted to other destinations following new US sanctions, Reuters reported on Friday, citing sources and LSEG trade flows.