Oil India, Indian Oil, Asian Paints: Oil-linked stocks in focus as crude oil prices see sharp drop

Oil prices, Reuters reported, fell more than $2 a barrel on Wednesday, weighed down by an OPEC report saying global oil supply will match demand in 2026, marking a further shift from its earlier projections of a supply deficit.

Brent crude futures settled at $62.71 a barrel, down $2.45, or 3.76%, after gaining 1.7% on Tuesday. U.S. West Texas Intermediate crude ended the session at $58.49 a barrel, down $2.55, or 4.18%, after climbing 1.5% in the previous session.

On Thursday, the commodity extended its decline.

According to news reports, US crude stockpiles rose by 1.3 million barrels in the week ended November 7. Gasoline and distillate stockpiles dropped, Reuters reported, quoting sources who cited the API data.

Prices fell more than $2 a barrel on Wednesday after the Organization of the Petroleum Exporting Countries (OPEC) published its monthly report saying global oil supply will slightly exceed demand in 2026, marking a further shift from the group's earlier projections of a supply deficit.

"OPEC's signal of a supply surplus unleashed previously pent-up bearish sentiment in the previous session, while a US crude inventory build added pressure, pushing oil prices to continue to slide on Thursday morning," Reuters reported, quoting Yang An, an analyst at Haitong Securities.

OMCs in India

HSBC Research, in its recent note, said Indian oil marketing companies (OMCs) have thrived in a volatile global market, with support from the Indian government. According to HSBC, OMCs have witnessed volatility in refining margins over the last six months, a potential risk in the U.S., which has prompted India to reduce its purchases of Russian crude oil, and the depreciation of the rupee against the U.S. dollar.

However, the Indian government has been backing OMCs by supporting decisions that are in the best interests of the companies. "Even in August, India imported 1.3 mbpd of Russian crude oil and promised to pay LPG under-recovery, which was incurred in FY24. All these factors, according to HSBC, have culminated in stocks of oil marketing companies rising by 14–23% in the last six months, whereas the Nifty50 has gained 12% in the same period," said a report by Fortune India.